Dear reader,
How have you been…truly, I would love to know how you are feeling at the moment😊 I’m okay from my end, striving each day as it comes.
I’m excited to write about this minor research I did about the auditing of listed companies on the Nairobi Securities Exchange (NSE).
Disclaimer: In no way is this analysis meant to elicit a negative outlook on any audit firm/listed company. The research was done to create awareness on auditors of listed companies in the Nairobi Securities Exchannge in the past financial year (FY 20/ FY 20 – 21). In addition, the analysis sought to discover the audit fee charged in the different industries.
I hope you find today’s blog informative. Also, feel free to share your views and what’s up via the comment section. I appreciate😊
More disclaimers about the researched listed companies
- I intentionally excluded parastatals in my analysis largely because they are often audited by the AG and my focus was on private audit firms.
- Annual reports for some listed companies were missing online/on their websites thus their omission.
- Other listed companies were suspended from trading on the NSE thus absence of their annual reports.
The above companies (omitted from the analysis) are listed below:
| Industry /Sector | Listed Company | Market Capitalization (As At 22/10/2021) | Reason for Non-Inclusion | |
| 1 | Banking | BK Group Plc. | 25,100,000,000 | Audited in Rwanda |
| 2 | Commercial & Services | Longhorn Publishers Plc. | 1,460,000,000 | Current Annual Report not yet published |
| 3 | Commercial & Services | Uchumi Supermarket Plc. | 80,300,000 | Current Annual Report not yet published |
| 4 | Commercial & Services | Deacons (East Africa) Plc. | Suspended trading on 15/10/2019 | NA |
| 5 | Commercial & Services | Nairobi Business Ventures Ltd. | 119,000,000 | Current Annual Report not yet published |
| 6 | Commercial & Services | Homeboyz Entertainment Plc. | 295,000,000 | Current Annual Report not yet published |
| 7 | Constructions & Allied | ARM Cement Plc. | Suspended trading on 15/10/2019 | NA |
| 8 | Constructions & Allied | E.A Portland Cement Ltd. | 686,000,000 | Audited by the Auditor General |
| 9 | Energy & Petroleum | KenGen Plc. | 29,500,000,000 | Audited by the Auditor General |
| 10 | Energy & Petroleum | Kenya Power & Lighting Plc. | 3,300,000,000 | Audited by the Auditor General |
| 11 | Energy & Petroleum | Umeme Ltd. | 11,100,000,000 | Audited in Uganda |
| 12 | Insurance | Kenya Re – Insurance Corporation Ltd. | 6,860,000,000 | Audited by the Auditor General |
| 13 | Investment | Trans – Century Plc. | 387,000,000 | Current Annual Report not yet published |
| 14 | Investment | Kurwitu Ventures Ltd. | 153,000,000 | Current Annual Report not yet published |
| 15 | Manufacturing & Allied | Carbacid Investments Plc. | 2,850,000,000 | Current Annual Report not yet published |
| 16 | Manufacturing & Allied | Mumias Sugar Co. Ltd. | Suspended trading on 16/10/2019 | NA |
| 17 | Manufacturing & Allied | Unga Group Ltd. | 2,270,000,000 | Current Annual Report not yet published |
| 18 | Manufacturing & Allied | Kenya Orchards Ltd. | 134,000,000 | Current Annual Report not yet published |
| 19 | Manufacturing & Allied | Flame Tree Group Holdings Ltd. | 219,000,000 | NA |
Initially, the data sample was 62 listed companies. However, with the exclusion of the above 19 companies due to the reasons stated, the sample reduced to 43 listed companies. (Please note that all information was retrieved from the annual reports of the respective listed companies. In case of any errors in the analysis, my sincere apologies.)
Analysis Results
| Audit Firm | Number of clients listed on the NSE (FY 20 OR FY 20/21) | Total Audit Fees (KES) |
| PricewaterhouseCoopers LLP** | 17 | 521,499,131 |
| KPMG Kenya* | 8 | 137,333,788 |
| Ernst & Young LLP | 7 | 301,104,000 |
| Deloitte & Touche LLP | 6 | 84,477,000 |
| RSM Eastern Africa LLP | 2 | 5,751,000 |
| PKF Kenya LLP* | 2 | 3,855,000 |
| Parker Randall Eastern Africa* | 1 | – |
| Grand Total | 43 | 1,054,019,919 |
As can be seen from the above table, PwC led in auditing more listed companies in the financial year 2020/2021. Second to it was KPMG Kenya. However, in terms of audit fees earned, Ernst & Young came second after PwC.
Sector Analysis Audit Remuneration in the financial year 2020 (FY 20/FY 20 – 21)
| Industry/Sector | Audit Remuneration Paid (FY 20/FY 20 – 21) |
| Banking | 418,243,000 |
| Insurance | 141,975,000 |
| Commercial & Services | 111,513,131 |
| Telecommunication & Technology | 105,200,000 |
| Manufacturing & Allied | 66,804,000 |
| Constructions & Allied | 66,164,000 |
| Investment | 58,875,000 |
| Agricultural | 43,543,000 |
| Automobiles & Accessories | 18,619,000 |
| Energy & Petroleum | 8,836,000 |
| Investment Services | 7,300,000 |
| Real Estate Investment Trust | 6,947,788 |
| Grand Total | 1,054,019,919 |
A breakdown of the above sector analysis
| Industry/Sector | Audit Remuneration Paid (FY 20/FY 20 – 21) |
| Banking | |
| KCB Group Plc. | 67,000,000 |
| Equity Group Holdings Plc. | 64,000,000 |
| ABSA Bank Kenya Plc. | 64,000,000 |
| The Co-operative Bank of Kenya Ltd. | 58,963,000 |
| Stanbic Holdings Ltd. | 46,000,000 |
| Standard Chartered Bank Kenya Ltd. | 42,000,000 |
| Diamond Trust Bank Kenya Ltd. | 40,469,000 |
| I & M Holdings Plc. | 35,811,000 |
| HF Group Plc. | Not disclosed in its annual report |
| NCBA Group Plc. | Not disclosed in its annual report |
| Insurance | |
| Britam Holdings Plc. | 47,646,000 |
| Jubilee Holdings Ltd. | 46,399,000 |
| CIC Insurance Group Ltd. | 24,559,000 |
| Sanlam Kenya Plc. | 23,371,000 |
| Liberty Kenya Holdings | Not disclosed in its annual report |
| Commercial & Services | |
| Nation Media Group Plc. | 36,700,000 |
| Kenya Airways Ltd. | 25,000,000 |
| WPP Scangroup Plc. | 24,049,000 |
| TPS Eastern Africa (Serena) Ltd. | 17,316,131 |
| Standard Group Plc. | 8,448,000 |
| Express Kenya Plc. | Not disclosed |
| Telecommunication & Technology | |
| Safaricom Plc. | 105,200,000 |
| Manufacturing & Allied | |
| East African Breweries Ltd. | 43,870,000 |
| British American Tobacco Kenya Plc. | 12,814,000 |
| B.O.C Kenya Plc. | 8,870,000 |
| Eveready East Africa Ltd. | 1,250,000 |
| Constructions & Allied | |
| Bamburi Cement Ltd. | 25,000,000 |
| Crown Paints Kenya Plc. | 21,005,000 |
| E.A Cables Ltd. | 20,159,000 |
| Investment | |
| Centum Investment Plc. | 55,020,000 |
| Home Afrika Ltd. | 3,855,000 |
| Olympia Capital Holdings Ltd. | Not disclosed in its annual report |
| Agricultural | |
| Sasini Plc. | 20,346,000 |
| Williamson Tea Kenya Plc. | 13,048,000 |
| Kakuzi Plc. | 6,554,000 |
| Kapchorua Tea Kenya Plc. | 1,708,000 |
| Eaagads Ltd. | 1,100,000 |
| Limuru Tea Co. Ltd. | 787,000 |
| Automobiles & Accessories | |
| Car & General (K) Ltd. | 14,118,000 |
| Sameer Africa Plc. | 4,501,000 |
| Energy & Petroleum | |
| Total Kenya Ltd. | 8,836,000 |
| Investment Services | |
| Nairobi Securities Exchange Plc. | 7,300,000 |
| Real Estate Investment Trust | |
| ILAM Fahari I-REIT | 6,947,788 |
| Grand Total | 1,054,019,919 |
A breakdown of audit firm earnings
| Audit Firm | Audit Fee Earned |
| PricewaterhouseCoopers LLP | 521,499,131 |
| KCB Group Plc. | 67,000,000 |
| Equity Group Holdings Plc. | 64,000,000 |
| Centum Investment Plc. | 55,020,000 |
| Britam Holdings Plc. | 47,646,000 |
| Jubilee Holdings Ltd. | 46,399,000 |
| Stanbic Holdings Ltd. | 46,000,000 |
| East African Breweries Ltd. | 43,870,000 |
| Nation Media Group Plc. | 36,700,000 |
| Kenya Airways Ltd. | 25,000,000 |
| CIC Insurance Group Ltd. | 24,559,000 |
| Sanlam Kenya Plc. | 23,371,000 |
| TPS Eastern Africa (Serena) Ltd. | 17,316,131 |
| B.O.C Kenya Plc. | 8,870,000 |
| Standard Group Plc. | 8,448,000 |
| Nairobi Securities Exchange Plc. | 7,300,000 |
| NCBA Group Plc. | Not Disclosed in its Annual Report |
| HF Group Plc. | Not Disclosed in its Annual Report |
| Ernst & Young LLP | 301,104,000 |
| Safaricom Plc. | 105,200,000 |
| ABSA Bank Kenya Plc. | 64,000,000 |
| The Co-operative Bank of Kenya Ltd. | 58,963,000 |
| Standard Chartered Bank Kenya Ltd. | 42,000,000 |
| Crown Paints Kenya Plc. | 21,005,000 |
| Total Kenya Ltd. | 8,836,000 |
| Eaagads Ltd. | 1,100,000 |
| KPMG Kenya | 137,333,788 |
| Diamond Trust Bank Kenya Ltd. | 40,469,000 |
| I & M Holdings Plc. | 35,811,000 |
| Sasini Plc. | 20,346,000 |
| E.A Cables Ltd. | 20,159,000 |
| British American Tobacco Kenya Plc. | 12,814,000 |
| ILAM Fahari I-REIT | 6,947,788 |
| Limuru Tea Co. Ltd. | 787,000 |
| Liberty Kenya Holdings | Not Disclosed in its Annual Report |
| Deloitte & Touche LLP | 84,477,000 |
| Bamburi Cement Ltd. | 25,000,000 |
| WPP Scangroup Plc. | 24,049,000 |
| Car & General (K) Ltd. | 14,118,000 |
| Williamson Tea Kenya Plc. | 13,048,000 |
| Kakuzi Plc. | 6,554,000 |
| Kapchorua Tea Kenya Plc. | 1,708,000 |
| RSM Eastern Africa LLP | 5,751,000 |
| Sameer Africa Plc. | 4,501,000 |
| Eveready East Africa Ltd. | 1,250,000 |
| PKF Kenya LLP | 3,855,000 |
| Home Afrika Ltd. | 3,855,000 |
| Express Kenya Plc. | Not Disclosed |
| Parker Randall Eastern Africa | – |
| Olympia Capital Holdings Ltd. | Not Disclosed in its Annual Report |
| Grand Total | 1,054,019,919 |
This was a research that popped up in my head and though heavy on the quantitatives, I hope you like it.
Reminder: all figures were extracted from listed companies annual reports, I have no claim over the stated figures. Also, in case of any error (omission or inclusion), I apologise. Please feel free to raise any concern or view in the comment section.
Thank you for reading, have a great time and see you next 😊.
frank.finance 
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