End-of-Year Financial Statement Checklist for Businesses in Nigeria

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Introduction

The end of the financial year has arrived and Nigeria-based businesses need to review their financial stance while maintaining regulatory standards for preparing next year’s operations. Financial statement preparation with an organized process assists organizations with fulfilling tax and audit necessities while revealing vital business information for forthcoming decisions.

The process of financial reporting remains challenging for most organizations, particularly during complex transactions and changes in regulations as well as tax requirements. Our business community in Nigeria can use this complete End-of-Year Financial Statement Checklist to maintain order and achieve both regulatory compliance and a strong financial position.

The end of this year creates an essential challenge for Nigerian businesses because they need to fulfill multiple regulatory requirements. A successful business with renowned status depends on compliance as more than just a legal requirement.

This piece delivers an extensive year-end compliance guide for Nigerian enterprises therefore they can sustain compliance through the next twelve months.

Why Are End-of-Year Financial Statements Important?

Business financial statements for the year’s end present more than numerical data because they showcase your organization’s financial activity throughout twelve months. These statements help every business setup from corporations to small businesses.

• The company needs to be in full compliance with financial reporting requirements established by the Financial Reporting Council of Nigeria (FRCN) as well as the International Financial Reporting Standards (IFRS).
• Your business needs to follow the process of correct tax assessment together with appropriate reporting to both the Federal Inland Revenue Service (FIRS) and the Lagos State Internal Revenue Service (LIRS).
• The analysis of financial data allows you to create attainable business goals and handle expenses for better profit outcomes.
• The audit preparation process becomes easier when you maintain proper financial report organization, decreasing your chances of compliance violations.
• The presentation of transparent and accurate financial statements acts as a magnet for investors together with stakeholders who want to trust a company.

The objective of the Checklist

The End-of-Year Financial Statement Checklist was purpose-built to assist Nigerian businesses no matter what their size for improved financial reporting efficiency. The step-by-step guide assists businesses to achieve the following outcomes:

• Execute financial data verification through the process of account reconciliation and transaction review with attention to maintaining current financial records.
• Businesses should identify and solve financial issues before presenting their reports to auditors, tax authorities, and stakeholders.
• The company must meet all Nigerian standards regarding accounting regulations as well as tax rules and industry regulatory requirements.
• Solaredge Corporation receives better strategic choices through financial data analysis which reveals its standing and profitable prospects and weak areas.
• Businesses should handle their open debts before the new budget year by creating financial targets while executing required alterations.

Business Depot Consulting developed this checklist to create an easier year-end financial review process which prepares Nigerian businesses for both compliance and effective financial usage throughout the new year.

Importance and Benefits of an End-of-Year Financial Statement Checklist for Businesses in Nigeria

Why is an End-of-Year Financial Statement Checklist Important?

For businesses in Nigeria, the end of the financial year marks a crucial period for assessing financial health, ensuring compliance, and preparing for future growth. An End-of-Year Financial Statement Checklist for businesses in Nigeria helps organizations systematically review their financial records, identify discrepancies, and make informed decisions for the next fiscal year.

We understand that financial reporting can be overwhelming, especially with evolving tax regulations, audit requirements, and financial complexities. This checklist is designed to simplify the process, ensuring your business remains compliant, transparent, and financially sound.

Key Importance of an End-of-Year Financial Statement Checklist

1️. Ensures Financial Accuracy and Transparency

Accurate financial statements are essential for understanding your company’s performance. The checklist helps:
Verify financial records and correct errors before submission.
Prevent misstatements or discrepancies that could lead to compliance issues.
Provide a clear and transparent financial overview for stakeholders.

2️. Regulatory Compliance with Nigerian Laws and Standards

Businesses in Nigeria must adhere to financial regulations set by bodies such as:
Financial Reporting Council of Nigeria (FRCN) – Which ensures compliance with International Financial Reporting Standards (IFRS).
Federal Inland Revenue Service (FIRS) – Enforces tax obligations like Company Income Tax (CIT), Value Added Tax (VAT), and Withholding Tax (WHT).
Corporate Affairs Commission (CAC) – Monitors corporate governance and annual filings.
Using a structured checklist ensures all financial reports align with Nigerian laws and prevent legal or financial penalties.

3️. Facilitates Efficient Tax Planning and Compliance

Tax obligations in Nigeria can be complex, but a checklist helps businesses:
Accurately assess tax liabilities and ensure proper tax filing with FIRS and state tax agencies.
Identify tax deductions, credits, and benefits to minimize tax burdens.
Avoid late tax payments and penalties by meeting deadlines.

4️. Strengthens Audit Readiness

Audits are a crucial part of financial reporting, whether internal, external, or regulatory. The checklist ensures:
All financial statements are audit-ready, reducing the risk of compliance issues.
Proper documentation of all transactions, journal entries, and adjustments.
A smooth audit process that enhances credibility and trust with investors, regulators, and banks.

5️. Enhances Business Decision-Making

Your financial statements provide valuable insights that drive business growth. The checklist helps:
Analyze profitability, cash flow, and overall financial performance.
Identify areas for cost reduction, revenue growth, and investment opportunities.
Develop a strategic plan for expansion, funding, or operational improvements.

6️ Improves Investor and Stakeholder Confidence

Well-prepared financial statements:
Boost investor confidence by showcasing transparency and financial stability.
Make it easier to secure loans, attract investors, or expand partnerships.
Help business owners and board members make informed decisions based on real financial data.

7️. Helps with Budgeting and Forecasting for the New Year

By assessing the past year’s performance, businesses can:
Create realistic financial goals and projections for the coming year.
Allocate resources efficiently to maximize profitability.
Set up contingency plans for financial risks and uncertainties.

Financial Statement Preparation

The proper creation of financial statements stands as a crucial element in the End-of-Year Financial Statement Checklist which functions for businesses in Nigeria. We guides its clients through the preparation process which ensures both precision and financial compliance and strategic financial management systems.

1. A financial position summary appears on the balance sheet

A company’s year-end financial situation becomes transparent when viewing its balance sheet data. The financial stability assessment relies on asset and liability and equity grouping to provide clarity.

Assets: What Your Business Owns

• Effectively record all bank balances as well as petty cash funds and short-term investments in the accounting system.
• The method of verifying open customer invoices and documenting non-payments includes doubtful debt provisions.
• A physical check of your inventory must be performed to verify accurate inventory records.
• The reporting accuracy requires checking property plant and equipment depreciation methods as well as impairment tests and valuation strategies.

Liabilities: What Your Business Owes

• All supplier invoices need to be both filed and verified properly under the Accounts Payable function.
• Organizations must record all delayed payment costs including personnel payments utility expenses and tax obligations.
• The financial statement audits must verify all long-term debts by confirming loan balances and interest payments as well as making sure debt covenant requirements are met.

Equity: Business Ownership and Profits

• Verify both existing issued company shares along with new capital acquisitions throughout the year.
• Organizations need to maintain an accurate accounting of retained earnings which should represent profits and losses that survived dividend payments.

2. Income Statement: Measuring Business Performance

The income statement presents the summary of revenue and expenses through which profitability emerges during the year.

Revenues: Earnings from Business Activities

• The company should verify all sales revenue for goods and services to ensure an accurate and complete total.
• Organizations should report all non-operating income consisting of interest income and rental earnings as well as discrete profitable events.

 Expenses: Costs Incurred to Generate Revenue

• Direct production costs for the goods along with services sold must be calculated to determine the Cost of Goods Sold (COGS).
• Evaluating administrative and marketing expenses together with rent payments utility bills and all other overhead costs exists as an essential step under this section.
• Organizations should record interest payments to their financing obligations as part of interest expense.

Net Income: The Bottom Line

Total revenue should be subtracted from total expenses to evaluate net income or compute the amount of loss.

All modifications for tax provisions must be dutifully recorded together with building depreciation numbers and extraordinary events.

Why Financial Statement Preparation Matters?

• Ensures regulatory compliance with the Financial Reporting Council of Nigeria (FRCN) and International Financial Reporting Standards (IFRS).
• The company maintains tax compliance through its financial statements while abiding by regulations of the Federal Inland Revenue Service (FIRS) and state tax authorities.
• Provides investors, banks, and stakeholders with clear insights into business performance and financial health.
• Assists in strategic decision-making for business growth and sustainability.

Account Reconciliations: Ensuring Accuracy in Financial Records

The End-of-Year Financial Statement Checklist demands account reconciliation as an essential practice because businesses in Nigeria should confirm their financial records match reality with their actual transactions. The process of reconciliation enables organizations to both detect mistakes and protect finances from improper use and provides businesses with detailed monetary information for better decision-making. Business records need to be reconciled properly against bank statements.

The process of financial reconciliation requires checking that bank balances match what is recorded in transactions. Companies benefit from such practices to avoid incorrect data reporting which would otherwise produce financial mismanagement problems.

The verification process confirms that every bank statement has received proper reconciliation

• Business records should be compared against bank statements to guarantee their alignment.
• The team should address all unreported deposits and unpaid bank fees together with unauthorized transactions.

All reconciliation processes should be updated regularly as part of standard procedures.

• A review must check any outstanding or uncleared checks to report them accurately.
• The records require adjustments for bank-related errors together with service charges and interest-earning transactions.

2. Accounts Receivable and Payable Reconciliations: Managing Cash Flow Efficiently

Businesses track payments accurately through reconciliations which maintain accounts receivable details with accounts payable data.

The organization should confirm the complete reconciliation status of all accounts receivable and payable entities.

• The company needs to verify invoice data meets payment records for every customer account.
• Management should review current invoices while evaluating the possibility of debts going bad.
• Payment and invoice data should match vendor account balances through cross-comparison.

All reconciliations must have current status 

• The organization follows up with late invoice payments to bring better control of cash flow.
• Workers must verify that the entire process of supplier payment processing has been executed accurately.
• We must correct all discovered inconsistencies that result from double invoices or excessive payment amounts.

3. Inventory Reconciliations: Ensuring Accurate Stock Records

The process of inventory reconciliation enables organizations to verify that recorded stock levels correspond with actual physical inventories thus protecting them from theft-related losses and damage and mismanagement incidents.

A complete check must verify that all inventory items received the counting and reconciliation process.

• The physical stock count should be performed alongside the recorded inventory records to confirm accurate storage values.
• Investigate all stock discrepancies while tracing both missing inventory and checking for excess stock quantities.

All reconciliations need to maintain the current status.

• The inventory system needs adjustments to make stock records reflect their actual quantities.
• Requests for inventory assessment serve to determine obsolete stock which aids in decision-making about new purchase options.

Journal Entries and Adjustments: Maintaining Accurate Financial Records

Properly recording and adjusting journal entries is a critical step in the End-of-Year Financial Statement Checklist for businesses in Nigeria. we emphasize the importance of reviewing all journal entries and financial adjustments to ensure compliance, accuracy, and transparency in financial reporting.

1. Review and Verify All Journal Entries and Adjustments

Journal entries form the foundation of a company’s financial records, capturing every transaction throughout the year. A thorough review ensures that errors are corrected before financial statements are finalized.

Cross-check all journal entries for accuracy

• Ensure that every transaction is recorded under the correct account.
• Identify and rectify incorrect or duplicate entries.
• Verify consistency with supporting documents (e.g., invoices, bank statements).

Confirm that all adjusting entries have been made

• Adjustments for depreciation, amortization, and accruals should be recorded properly.
• Reallocate misclassified transactions to their correct accounts.

2. Ensure All Journal Entries And Adjustments Are Properly Authorized and Documented

Financial transparency and compliance require that every adjustment is well-documented and approved.

Ensure proper authorization

• Journal entries, especially adjustments, should be reviewed and approved by management or an accountant.
• Unauthorized adjustments can lead to compliance issues or financial misstatements.

Maintain proper documentation

• Keep supporting documents for all journal entries, including invoices, contracts, and reconciliations.
• Document the rationale for each adjustment to ensure clarity for auditors and regulatory bodies like the Financial Reporting Council of Nigeria (FRCN).

3. Review and Verify All Accruals and Deferrals

Accruals and deferrals ensure that revenue and expenses are recorded in the correct accounting period, reflecting a true financial position.

Accruals: Recognize revenue and expenses when they are incurred, not when cash is received or paid.

• Verify accrued expenses such as salaries, rent, and utilities.
• Ensure revenue accruals align with completed work or services rendered.

Deferrals: Recognize revenue or expenses in future periods.

• Ensure prepaid expenses (e.g., insurance, rent) are recorded correctly.
• Confirm that deferred revenue is accounted for until the service or product is delivered.

Financial Statement Disclosures: Ensuring Transparency and Compliance

Businesses in Nigeria must follow the End-of-Year Financial Statement Checklist where financial statement disclosures guarantee transparency as well as regulatory fitment and market confidence. We support businesses through disclosure requirements to fulfill both the Financial Reporting Council of Nigeria (FRCN) and International Financial Reporting Standards (IFRS) regulations.

1. Review and Verify All Financial Statement Disclosures

A company’s financial position along with operational changes and the identification of its risks can be found through disclosures. The documentation and presentation of financial information leads to better credibility as well as compliance requirements.

Accounting Policies

• The report must include explicit descriptions of all financial reporting accounting methods.
• Few organizations must maintain accounting policies that correspond with both International Financial Reporting Standards and the Federation of Chinese Guilds and Nationalities guidelines.
• Financial statements must contain complete details about accounting method modifications together with their resulting financial effects.

Related-Party Transactions

• Disclose transactions with shareholders, directors, affiliates, and key management personnel.
• Full disclosure must exist for all related-party transactions that include loans as well as sales purchases and service agreements.
• The document should display pricing information along with terms and policies as well as reveal potential conflicts that may arise.

Commitments and Contingencies

• The company must provide details about contractual obligations of leases loans and purchase agreements.
• However, the company must disclose all ongoing legal proceedings pending litigations and existing tax disputes that affect the business’s financial position.
• The business should clearly explain all financial guarantees warranties and indemnities it offers to separate parties.

Significant Events and Transactions

• The financial report needs to explain mergers acquisitions and divestitures together with restructuring decisions.
• The company should reveal changes to the capital structure along with new share offerings and dividend distributions.
• Management should disclose all economic changes that impact business operations including currency value reductions combined with policy adjustments and shifts in the industry framework.

Common Year-End Accounting Mistakes to Avoid

When the deadline approaches mistakes become more likely to happen. Reviewing these mistakes will help prevent their occurrence. The following list presents frequent mistakes that occur during year-end accounting operations.

1. Failing to reconcile accounts regularly

The heavy workload sometimes creates stress which leads to postponing your account reconciliations resulting in financial records and bank statements mismatching.

The result? Your year-end financial reports will contain inaccurate information due to which performance assessment becomes challenging and bookkeeping operations suffer.

Regular account reconciliation is performed as a preventive measure that eliminates such problems. The built-in reminder system enables you to avoid forgetting about this necessary task. Account reconciliation with regular practice allows organizations to detect errors early to achieve accurate financial statements and simplifies the year-end financial closing process.

2. The act of disregarding both minor costs and receipts which do not get recorded.

Expenses that are lost to forgetfulness tend to include cash payments that start out resembling unimportant figures. Year-end financial statements become inaccurate because the non-recorded expenses eventually build up in total.

Record every expense and receipt repeatedly to avoid this issue regardless of the expense amount. The financial report accuracy will be ensured while year-end closing operations remain simple due to this approach.

3. The practice of neglecting financial report inspections for errors or inaccuracies exists.

Accounting works as a precise system and even the slightest mistakes throughout the process lead to enduring effects. Current financial reports may contain inaccuracies because of the absence of proper review which leads to misguiding stakeholders and affects decision-making while making regulation compliance harder to achieve.

All financial reports need a thorough examination for errors before delivering year-end reports to clients because it ensures financial integrity. All financial records need to be checked by a second set of eyes before verification of their accuracy versus current updates.

4. Business owners should avoid neglecting to record bad debts alongside outdated inventory valuations.

Writing off bad debts and obsolete stock constitutes an important mistake that must be avoided. The misstatement of assets along with financial health creates inaccurate profit margin calculations.

Periodic inventory and accounts receivable evaluations help detect items that should be written off to produce truthful financial statements about your business.

5. Your organization fails to standardize the procedures for annual financial closing activities

The survey conducted by APQC shows that 25% of companies finalize their annual closure within ten days. A standardized process for book closing exists as the primary reason behind their efficiency.

Lacking a clear organizational method will result in missing important tasks and deleting documents while generating late deliverables.

A non-standardized process for year-end closure generates both unwelcome stress levels and challenges correct financial report generation.

An effective solution to prevent this issue emerges through the implementation of checklists for standardizing year-end close procedures. Using Financial Cents or similar software helps you complete everything efficiently while validating that your financial records remain accurate.

Audit and Review: Ensuring Accuracy and Compliance

We emphasize the importance of audits and financial reviews as part of the End-of-Year Financial Statement Checklist for businesses in Nigeria. Whether your business is required to undergo an external audit or simply needs a review to ensure accuracy, this step is crucial for maintaining credibility, compliance, and financial integrity.

1. Determine If an Audit or Review Is Required

Businesses in Nigeria may need an audit or financial review based on their structure, industry, or regulatory requirements.

Mandatory Audit Requirements

• Public companies listed on the Nigerian Exchange Group (NGX).
• Companies are regulated by bodies such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), or the National Insurance Commission (NAICOM).
• Large private businesses exceed the turnover or asset threshold specified by the Companies and Allied Matters Act (CAMA).

When a Financial Review May Be Sufficient

• Small and medium enterprises (SMEs) that do not meet the statutory audit threshold.
• Businesses seeking internal financial assurance without a full external audit.
• Companies preparing for potential investments, loans, or regulatory evaluations.

2️. Plan and Execute Audit or Review Procedures

A well-organized audit process ensures efficiency, minimizes disruptions and strengthens financial reporting credibility.

Engage a Qualified Auditor

• Appoint a licensed auditor registered with FRCN and ICAN (Institute of Chartered Accountants of Nigeria).
• Ensure the auditor is independent and has no conflicts of interest with your company.

Prepare for the Audit Process

• Organize all financial records, including balance sheets, income statements, cash flow statements, and tax filings.
• Ensure proper documentation for all revenues, expenses, assets, liabilities, and equity transactions.
• Provide supporting documents such as bank statements, invoices, receipts, and payroll records.

Internal Audit Review (If Needed)

• Conduct a pre-audit self-assessment to identify and correct any financial discrepancies before the external audit.
• Implement internal control measures to prevent fraud, errors, or financial misstatements.

3️.Review and Verify All Audit or Review Reports

Once the audit or review is complete, businesses must ensure that findings are accurately documented and addressed.

Analyze the Auditor’s Report

• Review the audit opinion—whether it is unqualified (clean), qualified (issues found), or adverse (serious concerns).
• Understand key findings, recommendations, and potential risk areas.

Address Identified Issues

• Implement corrective actions for any financial discrepancies, compliance gaps, or internal control weaknesses.
• Update financial records and accounting policies to reflect auditor recommendations.

Communicate Findings with Stakeholders

• Share audit reports with investors, board members, and key management personnel as required.
• Ensure transparency in financial reporting to build trust with regulatory bodies, lenders, and stakeholders.

 Why Audits and Reviews Are Essential?

Ensures regulatory compliance with Nigerian financial laws and IFRS standards.
Enhances financial accuracy by identifying misstatements, fraud risks, and reporting errors.
Builds investor confidence, increasing chances for funding, loans, or partnerships.
Strengthens internal controls, helping businesses operate more efficiently and transparently.

Financial Statement Analysis: Gaining Insights for Business Growth

Financial Statement Analysis functions as an essential component that appears in the End-of-Year Financial Statement Checklist used by Nigerian businesses. Business owners together with financial managers use this process to evaluate performance and detect risks so they can make informed choices for the next financial year.

1. Review and Analyze Financial Statements

The structured evaluation of financial statements starting with balance sheets income statements and cash flow statements helps organizations decide their profitability level liquidity state and financial condition.

 Trend Analysis

• Companies should analyze their monetary data sets spanning two or more periods to discover changing business patterns within revenue streams and costs while detecting patterns of growth.
• The analysis helps flag warning indicators which may include decreases in sales performance and increases in debt or operational expenditure growth.
• Dealers use past data to predict future results for establishing financial milestone objectives.

 Ratio Analysis

Financial ratios give organizations a complete view of their financial health through their numerical data.

• The profitability ratios including Gross Profit Margin and Net Profit Margin allow examination of business profitability efficiency.
• Liquidity ratios including the Current Ratio and Quick Ratio illustrate the business’s capability to pay short-term responsibilities.
• – Leverage Ratios (e.g., Debt-to-Equity Ratio) → Determine the company’s financial risk and debt management efficiency.
• The Accounts Receivable Turnover along with other efficiency ratios helps organizations measure resource usage effectiveness.

 Variance Analysis 

• An analysis of financial performance through budgeting compared to actual numbers allows the detection of any discrepancies.
• An organizational investigation should be conducted whenever revenue losses reach vital levels when costs exceed budget or when there are unanticipated financial gains.
• Financial strategies need adjustment according to the results from the analysis.

2. Businesses need to discover major financial patterns in the market to develop appropriate responses.

After performing financial analysis businesses need to take the findings as cues to enhance their financial stability along with implementing strategic planning systems.

Address Financial Weaknesses

• To improve low liquidity you should either reduce costs or get extra funding through working capital.
• Declining profitability requires business managers to reassess their pricing methods sales targets and internal operational processes.

Leverage Strengths for Growth

– Identify high-performing products or services and allocate more resources toward them.

– Explore opportunities for expansion, partnerships, or new investments.

Improve Financial Decision-Making

– Use financial insights to guide budgeting, forecasting, and business strategy adjustments.

– Align future decisions with both short-term goals and long-term financial sustainability.

Tax Planning and Compliance: Ensuring Financial and Legal Stability

A crucial part of the End-of-Year Financial Statement Checklist for businesses in Nigeria is Tax Planning and Compliance. Proper tax management helps businesses avoid penalties, maximize tax benefits, and maintain compliance with Nigerian tax regulations.

1️. Review and Verify All Tax Obligations

Ensuring compliance with all relevant taxes is essential for financial stability. Businesses must confirm that all tax-related filings and payments are accurate and up to date.

Company Income Tax (CIT)

• Verify that CIT returns have been filed and paid on time to the Federal Inland Revenue Service (FIRS).
• Review taxable profits and confirm that applicable tax rates (typically 30% for large companies, 20% for medium-sized businesses, and 0% for small businesses) are correctly applied.

Value Added Tax (VAT)

• Ensure that VAT returns (7.5%) have been correctly calculated and remitted to FIRS.
• Cross-check that output VAT (collected from customers) and input VAT (paid on business expenses) are properly accounted for.

Withholding Tax (WHT)

• Confirm that WHT deductions on payments to vendors and service providers have been properly filed and remitted.
• Ensure that WHT certificates are issued to suppliers and contractors in compliance with FIRS and state revenue service regulations.

Pay As You Earn (PAYE) and Payroll Taxes

• Verify that PAYE deductions for employees have been correctly calculated and remitted to the Lagos State Internal Revenue Service (LIRS) or other state tax authorities.
• Confirm compliance with pension contributions, National Housing Fund (NHF), and other statutory deduction

2. Ensure Timely Tax Filing and Payment Compliance

To avoid penalties and legal issues, businesses must meet tax deadlines set by FIRS and LIRS.

Cross-check all tax returns for accuracy before submission.
Ensure that tax payments are made within the deadlines to avoid fines.
Keep proper records of all tax filings, payments, and receipts for future reference and audits.

3. Optimize Tax Planning for Business Growth

A well-structured tax planning strategy helps businesses legally reduce tax liabilities while maximizing profits.

Take advantage of tax incentives and exemptions (e.g., small business tax relief, pioneer status incentives).
Plan for tax-efficient investments and expense deductions to reduce taxable income.
Consult with tax professionals to ensure compliance and explore savings opportunities.

Regulatory Compliance: Ensuring Legal and Operational Stability 

The End-of-Year Financial Statement Checklist for Nigerian businesses fundamentally requires businesses to ensure regulatory compliance. Adherence to legal and statutory requirements prevents business penalties while strengthening corporate credibility which enables operational stability.

1. Verify Business Registrations

All Nigerian businesses need to verify the ongoing validity of their regulatory submissions at governmental agencies for legal operations.

Corporate Affairs Commission (CAC) Registration

• A properly registered business with the CAC should maintain updated filings of annual returns along with shareholder updates.
• Businesses should check their compliance with the Companies and Allied Matters Act (CAMA) to prevent enforcement penalties.

Federal Inland Revenue Service (FIRS) Registration

• The business must prove its registration for tax purposes through FIRS.
• Businesses must maintain an active Tax Identification Number (TIN) for valid tax documentation during both tax filings and commercial exchanges.

Lagos State Internal Revenue Service (LIRS) Registration (for businesses operating in Lagos)

• The business needs to demonstrate that all state taxes such as PAYE and development levies are fully updated and current.
• The administration of employee tax deductions needs to be done correctly by the organization and must be properly remitted to the authorities.

2 Compliance with Employee Welfare Regulations

National Pension Commission (PENCOM) Compliance

• The business should show PENCOM registration for required employee pension contribution requirements.
• The business should correctly compute pension payments of 10% from employers combined with 8% from employees and send them to the selected pension fund administrator (PFA).

National Health Insurance Scheme (NHIS) Compliance

• The company needs to register its employees either under the NHIS or an approved Health Maintenance Organization (HMO).
• The organization should verify both the deductions and payments for monthly health insurance contributions.

3. Review Other Industry-Specific Compliance Requirements

• Businesses in banking finance and investment must follow the rules set by the Central Bank of Nigeria (CBN) as well as the Securities and Exchange Commission (SEC).
• Businesses operating in oil, gas, and energy must check their compliance status with both the Department of Petroleum Resources (DPR) and the Nigerian Content Development and Monitoring Board (NCDMB).
• For businesses in telecommunications: Ensure compliance with the Nigerian Communications Commission (NCC).

CAC Compliance Requirements

Every business entity must file its annual returns 18 months from incorporation before June 30th. The Company risks becoming delisted/struck off from the CAC list and being marked inactive when defaulting on national reporting duties. Penalties apply for all years of delay.

According to the PSC regulations 2022, every company must announce its persons with significant control (PSC) while such a PSC needs to submit both significant control and at least 5% share ownership in the company. Criminal penalties apply to defaulting companies alongside their executives for non-compliance.

BI-ANNUAL RETURNS FILING:

Each incorporated trustee must file their bi-annual statement of Affairs that represents the January 1st to June 30th and July 1st to December 31st periods annually by section 845(1) of the Companies and Allied Matters Act 2020 and Regulation 32 of the Companies Regulations 2021. None of the statements can be filed past July 15 (statement ending 30th) and January 15th (statement ending December 31st).

Tax compliance: Whereas tax compliance indicates that a business decision is a compliance to tax rules of the country, each business has to file the incorporated company income tax (CIT) within 18 months from the date of incorporation and on or before 30th of June of each year and the value Added Tax each month on or before the 14th day of every month. Failure to pay tax and file tax returns could result in heavy fines and eventual closure of the business.

Financial records: The financial records of a company should be maintained. Preparation of audited or unaudited financial reports must be prepared, the same presented to shareholders and debenture holders, where applicable, and also filed with the Corporate Affairs Commission when filing the annual returns.

Data Protection and Privacy: Data controllers and processors must obey data protection laws through the implementation of the Nigeria Data Protection Regulation (NDPR).

Intellectual property: Both organizations and their staff must recognize and plan for the renewal periods of their registered intellectual property rights which include trademarks copyrights and patents while teaching employees about their rights and ways of recognizing infringement.

Corporate Governance principles: Corporate governance principles at present only apply to large entities because regulatory bodies such as the Nigerian Code of Corporate Governance set these requirements. The company must organize annual general meetings together with the required documentation.

Specific Industry Compliance: The business must follow every condition established by the regulatory framework that governs its core industry. Nigerian food and cosmetics producers must follow NAFDAC standards when importing and supplying products that they produce in Nigeria as well as SON product registration requirements.

Types of End-of-Year Financial Statement Checklist for Businesses in Nigeria

Different businesses require varying levels of financial assessment and compliance to close the financial year successfully. Below are the key types of End-of-Year Financial Statement Checklists for businesses in Nigeria, tailored to different business needs:

1️. General Financial Statement Checklist

Applicable to: Small, Medium, and Large Enterprises
Purpose: Provides a comprehensive review of financial records, regulatory compliance, and tax obligations for all businesses.

Key Components:

• Preparation of Balance Sheet, Income Statement, and Cash Flow Statement
• Bank and account reconciliations
• Tax compliance verification (CIT, VAT, WHT, PAYE)
• Regulatory compliance (CAC, FIRS, LIRS, PENCOM, NHIS)
• Audit and review planning

2️ . Small Business Financial Statement Checklist

Applicable to: Sole Proprietors, Startups, and SMEs
Purpose: Helps small businesses ensure they maintain basic financial accuracy and comply with tax laws.

Key Components:

• Profit & Loss statement preparation
• Cash flow tracking and bank reconciliation
• Accounts receivable/payable review
• Basic tax compliance check (VAT, PAYE, WHT, CIT if applicable)
• Expense and budget analysis for future planning

3. Corporate & Multinational Financial Statement Checklist

Applicable to: Large corporations, multinational companies, and publicly traded firms
Purpose: Focuses on compliance with IFRS, regulatory obligations, and detailed financial analysis.

Key Components:

• Comprehensive financial statement preparation (Balance Sheet, P&L, Cash Flow)
• IFRS-compliant financial disclosures
• Review of international taxation & transfer pricing
• External audit planning & compliance
• Employee benefits and pension fund compliance

4️. Tax-Focused Financial Statement Checklist

Applicable to: All businesses, particularly those with complex tax structures
Purpose: Ensures businesses are fully tax-compliant with Nigerian tax authorities and avoid penalties.

Key Components:

• Computation and verification of Company Income Tax (CIT)
• VAT reconciliation and remittance verification
• Withholding Tax (WHT) compliance
• PAYE tax compliance for employees
• Filing tax returns with FIRS and LIRS

5️. Audited Financial Statement Checklist

Applicable to: Large businesses, NGOs, and companies requiring external audits
Purpose: Ensures that financial records are audit-ready and comply with the Financial Reporting Council of Nigeria (FRCN) and IFRS.

Key Components:

• Preparation of financial statements in audit-ready format
• Review and correction of journal entries
• Ensuring all disclosures are in place (related-party transactions, contingencies, commitments)
• Internal audit report review and reconciliation
• Coordination with external auditors

6️. Industry-Specific Financial Statement Checklist

Applicable to: Businesses in banking, oil & gas, telecoms, manufacturing, and healthcare
Purpose: Ensures compliance with sector-specific financial regulations and standards.

Key Components:

• Industry-specific revenue recognition rules (CBN, SEC, DPR, NCC)
• Compliance with government reporting requirements
• Sector-specific tax obligations and deductions
• Asset valuation and impairment checks

Best Practices for a Healthy Year-End Close without Stress

Consider the following tips for easy management and smooth sailing through a year-end close.

1. Get going ahead of time

Preparation for fiscal-year accounting should begin well ahead of time so that heartaches don’t have to dawn just before the last minute. Issues should be identified early and made smooth for the organization’s year-end close.

2. Give and Take

Delegate according to your members and fully leverage accounting technology to replace all repetitive tasks that require collecting documents or reminders or send follow-ups. This makes it more efficient and more accurate by reducing all manual errors involved.

3. Close monthly

There is no need to wait for the end of the year before you close your books. Monthly closes can be maintained to give an accurate portrayal of records while catching problems early in the game: making year-end close a little less intimidating process.

Conclusion

As businesses in Nigeria prepare to close their financial year, a well-structured End-of-Year Financial Statement Checklist is essential for ensuring accuracy, compliance, and strategic planning.

 Key Takeaways

Financial Statement Preparation – Ensuring accurate Balance Sheets, Income Statements, and Cash Flow Statements for financial clarity.
Account Reconciliations – Verifying bank accounts, inventory, and payables/receivables to prevent discrepancies.
Audit and Compliance – Ensuring adherence to FIRS, LIRS, CAC, IFRS, and other regulatory requirements.
Tax Planning & Regulatory Compliance – Avoiding penalties by meeting CIT, VAT, WHT, and PAYE obligations.
Financial Analysis – Conducting trend, ratio, and variance analyses for better decision-making.

Why is the End-of-Year Financial Statement Important?

• Ensures Legal & Tax Compliance – Avoids fines and regulatory issues.
• Provides a Clear Financial Overview – Helps businesses assess performance and plan for growth.
• Supports Strategic Decision-Making – Identifies opportunities for expansion and cost-cutting.
• Boosts Investor & Stakeholder Confidence – Transparent records build trust with investors and partners.

Final Thoughts & Recommendations

Start early! Don’t wait until the last minute to review your finances.
Work with financial professionals to ensure compliance with Nigerian tax laws and IFRS.
Use accounting software or professional services for seamless financial reporting.
Regularly update and review financial records to make year-end processes smoother.

By following a structured End-of-Year Financial Statement Checklist for businesses in Nigeria, companies can avoid risks, maximize efficiency, and plan for a more profitable future!

Additional Resources

To ensure businesses in Nigeria meet all financial reporting and compliance requirements, the following resources provide guidance, industry best practices, and regulatory support.

 Relevant Accounting and Financial Reporting Standards in Nigeria

1. International Financial Reporting Standards (IFRS) – Adopted by Nigeria for financial reporting.
2. Financial Reporting Council of Nigeria (FRCN) Guidelines – Provides regulatory oversight on financial statements.
3. Companies and Allied Matters Act (CAMA) 2020 – Governs financial record-keeping and reporting for registered businesses.
4. Central Bank of Nigeria (CBN) Guidelines – Financial regulations for businesses in the banking and financial sectors.

 Key Regulatory Requirements and Guidelines in Nigeria

1. Corporate Affairs Commission (CAC) – Ensures business registration and statutory filings.
2. Federal Inland Revenue Service (FIRS) – Oversees Company Income Tax (CIT), Value Added Tax (VAT), Withholding Tax (WHT), and Pay-As-You-Earn (PAYE) compliance.
3. Lagos State Internal Revenue Service (LIRS) – Manages state tax compliance for businesses in Lagos.
4. Securities and Exchange Commission (SEC) Guidelines – Essential for publicly traded companies.
5. National Pension Commission (PENCOM) – Regulates pension contributions and compliance.
6. National Health Insurance Scheme (NHIS) – Ensures compliance with health insurance policies.

Industry Associations and Professional Bodies in Nigeria

1. Institute of Chartered Accountants of Nigeria (ICAN) – Governs accounting and auditing standards.
2. Association of National Accountants of Nigeria (ANAN) – Provides support for professional accountants.
3. Chartered Institute of Taxation of Nigeria (CITN) – Regulates tax practices and compliance.
4. Nigeria Employers’ Consultative Association (NECA) – Offers business compliance and advisory support.
5. Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) – Supports business growth and regulatory compliance.

 Other Useful Resources

• Accounting Software Solutions – QuickBooks, Sage, Xero, and Wave Accounting for efficient financial management.
• Government Websites – CAC (cac.gov.ng), FIRS (www.firs.gov.ng), LIRS (www.lirs.gov.ng) for tax and regulatory information.
• Business Consulting & Audit Firms – PwC, KPMG, Deloitte, and EY for corporate compliance and advisory services.

By leveraging these additional resources, businesses in Nigeria can strengthen their financial reporting, compliance, and strategic planning efforts for long-term success. ✅

Detailed End-of-Year Financial Statement Checklist for Businesses in Nigeria

Ensuring accuracy in financial reporting is crucial for business compliance and strategic planning. Below is a comprehensive checklist to guide Nigerian businesses through the end-of-year financial statement preparation process:

1. Balance Sheet Review

• Verify that all assets, liabilities, and equity accounts are correctly classified and reported.
• Ensure that all accounts are properly valued and adjusted.
• Review and confirm the accuracy of all account reconciliations.

2. Income Statement Review

• Verify that all revenues and expenses are correctly classified and reported.
• Ensure that all accounts are properly valued and adjusted.
• Review and confirm the accuracy of all account reconciliations.

3. Account Reconciliations

• Confirm that all bank statements have been reconciled.
• Ensure all reconciliations are up-to-date.
• Review and verify all accounts receivable and payable reconciliations.
• Review and verify all inventory reconciliations.

4. Journal Entries and Adjustments

• Review and verify all journal entries and adjustments made during the financial year.
• Ensure all journal entries and adjustments are properly authorized and documented.
• Review and verify all accruals and deferrals.

5. Financial Statement Disclosures

• Review and verify all required disclosures, including:
  • Accounting policies
  • Related-party transactions
  • Commitments and contingencies
  • Significant events and transactions

6. Audit and Review

• Determine if an external audit or internal review is necessary.
• Ensure all audit or review procedures are properly planned and executed.
• Review and confirm all audit or review reports and communications.

Call to Action

Take Control of Your Year-End Financial Reporting Today!

Don’t let financial inaccuracies or compliance issues slow down your business growth. Use this End-of-Year Financial Statement Checklist for Businesses in Nigeria to ensure accuracy, compliance, and financial clarity.

Need expert assistance with your financial statements? Contact us today for professional accounting, audit, and compliance support!

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