Auditors of the Nigerian National Petroleum Corporation (NNPC) have questioned the viability of the company as its current liabilities exceeded its current assets by N4.6 trillion.
The Auditor’s concern is contained in the 2020 financial year of the corporation which indicates a net profit of N287.2 billion.
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The auditors; PricewaterhouseCoopers (PWC), SIAO Partners and Muhtari Dangana & Co, noted that liabilities are a threat to NNPC’s going concern status.
According to the audit firms, NNPC Group has sustained recurring losses over the years culminating into accumulated losses of approximately N1.5tr, and therefore may be unable to realize its assets and discharge its liabilities in the normal course of business.
NNPC had total current assets of N6.258tr and total current liabilities of N10.818tr as at year-end 2020, hence the gap flagged by the auditors.
The biggest contributors to the current liabilities were trade and other payables, they said.
In a statement signed on 6th September 2021, the three firms opined that the liabilities indicate that a material uncertainty exists that may cast significant doubt on the group and corporation’s ability to continue as a going concern.
If a business is not a going concern, it means it’s gone bankrupt and its assets were liquidated.
Chartered Accountant and Managing Director Qeeva Advisory Limited, Matthew Ogagavworia said: “What the audit firms are saying is that NNPC can die at any moment unless there is special support from the federal government of Nigeria.
He said the corporation can owe several people, but noted that somebody has to be given money to be alive.