How Cardoso Deceived Tinubu, National Assembly In 2025 CBN Audited Financial Statement — Special Investigator

Jim Obazee, President Bola Tinubu’s Special Investigator, has accused the Central Bank of Nigeria (CBN) Governor Olayemi Cardoso, of deceiving both the President and the National Assembly in presenting the bank’s 2025 audited financial statement.

Obazee further claimed that, in an eight-page analysis, the apex bank effectively dismissed all Nigerians as “financial reporting illiterate” while sharply criticising the bank’s disclosures.

Obazee, appointed by President Tinubu in 2023 to investigate the CBN, its related entities, and Key Government Business Entities (GBEs) for malfeasance and to recover looted assets, made these allegations on Tuesday at the official commissioning of the new Lagos headquarters of the Financial Reporting Council (FRC), where he once served as the founding Chief Executive Officer.

The Special Investigator, in whose honour a section of the new building was designated as the “Jim Obazee Inspections and Investigations Meeting Room,” asserted that the summary consolidated and separate financial statements for the year ended 31 December 2025—released by the CBN on 29 July 2026—contained “questionable issues that are shocking, brazen and vexatious.” He noted that these concerns echoed similar issues about the CBN’s 2024 accounts summary published the previous year.

Obazee questioned why the CBN has withheld fully audited financial statements for both 2024 and 2025, instead publishing only summaries. He argued that these summaries, on their own, do not justify withholding the complete statements, especially when the law and financial reporting standards—specifically Section 50 of the CBN Act, 2007—require a full set of financial statements.

He cited several questionable practices in the 2024 summary, including withholding of the full financial statement; using ₦4.898 trillion to generate ₦4.205 trillion, creating a misleading impression of the bank’s performance by reporting other operating income of ₦12.176 trillion, of which ₦11.602 trillion was a net unrealised gain on foreign exchange revaluation; and deferring ₦11.884 trillion in interest and cost, as noted on page 54 of the published summary.

Regarding the 2025 summary of consolidated and separate financial statements published in July, Obazee alleged fraudulent financial reporting, with figures that are not comparable year-on-year.

He also criticised the document, which the joint auditors—Ernst & Young and KPMG—had warned lacked the full disclosures required by International Financial Reporting Standards (IFRS) Accounting Standards, the CBN Financial Reporting Manual (2025), the CBN Act 2007, and the FRC Act 2011 (as amended).

The Special Investigator described the published summary, which the auditors said is not a substitute for fully audited financial statements, as riddled with confusing financial reporting directions, earnings management, deceptive accounting practices, and issues related to auditor independence.

According to the auditors’ warning on page 145 of the document, the full financial statements received an “unmodified opinion with Emphasis of Matter relating to non-compliance with section 38 of the CBN Act and the basis of accounting.”

Both EY and KPMG stated that the full report included Key Audit Matters (KAM) that were most significant in their audit—matters that were omitted from the summary released by the CBN.

“If these are the financial statements that the CBN transmitted to the President and the National Assembly in compliance with Section 50 (1) of the CBN Act, 2007, the CBN has deceived the President and the National Assembly. They certainly have called every Nigerian a “financial reporting illiterate” since they released the said financial statements on the World Wide Web for the entire world to see. If the CBN gave the President and the National Assembly a different set of Financial Statements from what they released on the internet, it would still have the same deceptive effect as seen on Page 145”, stated Obazee.

Obazee’s critique raises questions about transparency and accountability in the CBN’s financial disclosures and calls for greater scrutiny by lawmakers, policymakers, and adherence to statutory and professional standards in the preparation and publication of the bank’s financial statements.

View Below The Speech Delivered By Jim Obazee At The Commissioning Of The New FRC Headquarters In Lagos

 

SPEECH BY MR. JIM OSAYANDE OBAZEE AT THE OFFICIAL COMMISIONING OF THE FINANCIAL REPORTING COUNCIL OF NIGERIA HEADQUARTERS IN LAGOS ON TUESDAY, 01 SEPTEMBER 2026

Protocols

I am indeed grateful for this honour that the management of the Financial Reporting Council of Nigeria (FRC) has bestowed upon me today by naming their “Inspections and Investigation Room” after me. I am humbled by the kind words expressed in the letter that conveyed the honour, especially the paragraph that says, “the room will permanently bear your name as a lasting tribute to your outstanding achievements, exemplary leadership, and invaluable contributions to the development of our nation.” More humbling is the assertion that says “this recognition reflects the Council’s profound appreciation for the values of integrity, excellence, patriotism, and service that you embody. It is our hope that generations of professionals, regulators, policymakers, and stakeholders who utilize this facility will draw inspiration from your distinguished legacy and commitment to national progress”. I thank you very much for these kind words.

Naturally, as the last Executive Secretary/CEO of the Nigerian Accounting Standards Board (NASB) and the first Executive Secretary/CEO of the NASB successor organisation, the Financial Reporting Council of Nigeria (FRC), it is expected that I should use this opportunity to speak about the birth of the FRC especially as the Financial Reporting Council of Nigeria Act, 2011 came via Private-member Bill rather than an Executive Bill. I will save that for a different occasion and/or when my book is unveiled. For now, permit me to focus on the official commissioning of this FRC headquarters and the need for the effective use of the “Jim Osayande Obazee Inspections and Investigation Room”.

In 2015, when we were looking for a building to acquire as the FRC headquarters, this building was our initial choice. We rejected it because we observed that the car pack was small and opted to get a land and build our own in Abuja. This was because we were looking for a space that is big enough to accommodate the FRC Headquarters as well as the proposed IFRS Academy. As providence will have it, your management came back to acquire the same building eleven (11) years later. This is amazing and destiny propelled.

As for Inspections and Investigation, I wish to request that your management increase your activities in this area of the Council’s mandate; not by using consultants but, by using full-time staff that are well trained; so as to retain the body of knowledge that will arise from such endeavour. The financial statements that I see these days leave much to be desired. It is important that the FRC confront this challenge as a matter of urgency.

Permit me to draw your attention to two or three instances to let you know how weighty this matter has become. As you are well aware, Section 8(1)(e) of the FRC Act, 2011 states that “the Council shall advise the Federal Government on matters relating to accounting and financial reporting standards”. This advice is again required now. I did a lot of that when I was the CEO of this Council. I don’t know whether you have seen the financial statements issued by some government establishments recently? If you haven’t, let me request you to please do so; and thereafter take them (and their external auditors) to this new “Inspections and Investigation Room” as soon as possible.

First, of the instances, is the Central Bank of Nigeria (CBN). The CBN published a “summary consolidated and separate financial statements for the financial year ended 31 December 2024” last year without publishing the full audited financial statements. Summary financial statements do not, by themselves, justify withholding the complete annual financial statements from users where the applicable law and/or financial reporting framework requires a complete set of financial statements; as provided for by Section 50 of the CBN Act, 2007. That 2024 summary financial statement had a lot of financial reporting issues. I had thought that the FRC has called the CBN to order on it until I saw the CBN “summary consolidated and separate financial statements for the financial year ended 31 December 2025” that the CBN released on 29 July 2026. The questionable issues in these financial statements are nothing but, shocking, brazen and vexatious. If this is the financial statements that the CBN transmitted to the President and the National Assembly in compliance with Section 50 (1) of the CBN Act, 2007, the CBN has deceived the President and the National Assembly. They certainly have called every Nigerian a “financial reporting illiterate” since they released the said financial statements on the World Wide Web for the entire world to see. If the CBN gave the President and the National Assembly a different set of Financial Statements from what they released on the internet, it would still have the same deceptive effect (see Page 145). Let me give you a few of my critical concerns.

a) Fraudulent Financial Reporting

The year-on-year figures are not comparable.

Page 157 – Basis of preparation: This page states explicitly that the CBN Financial Reporting Manual was applied to the Bank beginning 1 January 2025; the Manual does not apply to subsidiaries or associates; the prior year statements were prepared under IFRS Accounting Standards and the FRC Guideline; and “the numbers are not comparable.”

This means that virtually every apparent year-on-year movement must be treated with caution. This raises four immediate forensic questions: what were the quantitative opening adjustments? why were comparative columns retained without restatement? which consolidated adjustments convert subsidiary IFRS numbers to Group policies? and what would 2025 profit/equity have been under the former IFRS basis that was used to prepare the 2024 figures? From the 2025 numbers, page 149 shows Group equity of N937.338 billion against assets of 138.856 trillion; producing an accounting equity-to-assets ratio of only about 0.68%. For the CBN alone, it is approximately 0.43%. Is this the financial statements where the comparative figures should be rendered useless to users?

On Page 145 the independent joint auditors’ report (EY and KPMG) says the summary statements are consistent with the audited statements under the Bank’s framework but expressly warned that the summary does not contain all disclosures required by IFRS Accounting Standards, the CBN Financial Reporting Manual (2025), the CBN Act, 2007 and the FRC Act, 2011 (as amended) and is not a substitute for the full audited financial statements. More significantly, they disclose that the full statements received an “unmodified opinion with Emphasis of Matters relating to non-compliance with Section 38 of the CBN Act and the basis of accounting”, They also state that the full report contains Key Audit Matters (KAM) that were most significant in their audit (BUT ARE NOT INCLUDED IN THIS SUMMARY). Keeping the CBN 2025 audited Consolidated and Separate Financial Statements and the joint Auditors’ Report thereon, under these circumstances, as a CBN internal preserve is fraudulent and an intolerable disservice to Nigerians and to the government (the policymakers).

The fundamental purpose of comparative figures is not merely to reproduce the previous year’s numbers. They provide a benchmark against which the current year’s financial information can be understood and evaluated. In the context of a central bank, comparative figures therefore serve four particularly important functions namely, comparability, trend identification, accountability, and an enabler of informed economic and financial policy decisions.

A central bank is a public institution managing important national financial resources. Comparative information enables government, legislature, auditors, financial institutions, and the public to evaluate how those resources have changed over time. With it, users can see whether foreign reserves, currency in circulation, government deposits, or monetary policy-related liabilities have increased or decreased and why?

They help reveal trends in important central bank items such as foreign exchange reserves, holdings of government securities, loans and advances to banks or government, currency issued and currency in circulation, interest income and expenses, valuation gains or losses, capital and reserves, etc.

When a central bank states that the year-on-year figures in its annual financial statements are “not comparable,” that is a significant accounting statement. It means that users should not interpret the difference between the current year’s figures and the previous year’s figures simply as increases or decreases in economic activity or financial performance. So, what does the CBN want Nigerians and the government to use its 2025 summary consolidated and separate financial statements to do when a simple 2025 versus 2024 comparison is potentially misleading? This is tantamount to cooking the “books” and having an illusion of grandeur.

b) Confusing financial reporting directions

Page 158 Consolidation policy: The page says subsidiaries’ accounting policies are adjusted to conform to Group policies. That requires examination because Page 157 simultaneously says the CBN Manual does not apply to subsidiaries. There must therefore be a consolidation conversion layer.

Page 161 Foreign exchange revaluation/ Derivative and Foreign Exchange Revaluation Account (DFERA): The policy says realised FX gains/losses go to the income statement, whereas certain unrealised FX gains/losses are recognised in the statement of financial position through the Derivative and Foreign Exchange Revaluation Account (DFERA). This is a major “special basis” accounting treatment. IAS 21’s general IFRS framework recognises exchange differences on monetary items in profit or loss, subject to specified exceptions such as particular net-investment situations. The magnitude of DFERA of 13.712 trillion (Page 189) makes this one of the highest risk accounting policy areas. Page 162 – Foreign currency transactions policy: This page says “differences arising from settlement or translation of foreign currency monetary items are recognised in the statement of profit or loss.” This conflicts with page 161’s DFERA treatment of unrealised monetary item differences. The CBN management must provide a precise scope reconciliation explaining which items go to Profit or Loss, which go to DFERA, why, and under which controlling paragraph of the Manual.

Page 168 ECL methodology: This is a high-risk internal methodology issue. The general ECL model refers to three probability weighted scenarios: base, upturn and downturn. However, the treatment of loan commitments stated on the same page refers to weighting four scenarios. This may be a genuine methodological distinction or simply drafting inconsistency; either way, the ECL model documentation should specify exactly how many scenarios apply by portfolio and why.

Page 149-Statement of financial position: Group assets rise to approximately 138.856 trillion, but several concentrations dominate: external reserves 61.237 trillion, debt instruments at amortised cost N33.430 trillion and other assets 19.276 trillion. On the liability side, CBN instruments issued rise to 48.703 trillion from N24.270 trillion (non-comparable figure). Group equity is only N937.338 billion, while Bank-level accumulated loss remains 135.671 billion. The composition of “other assets”, Long-term loans of N2.599 trillion, Other loans N482.009 billion (page 186) and the CBN instruments are therefore much more important than the headline group profit of N136.438 billion number.

Page 197FGN advances and related parties (legal and accounting issue): This is probably the single most important transaction note when read together with the auditors’ Section 38 Emphasis of Matter. Advances to the Federal Government close at approximately 2.977 trillion at 31 December 2025 (from the Group as there is no column for the Bank). The 2024 movement contains a line labelled “Securitization of asset” of 2.289 trillion, and the 2024 closing balance was N3.268 trillion. Section 38 of the CBN Act permits temporary advances for temporary budget revenue deficiencies, caps the outstanding amount at 5% of the prior year’s actual Federal Government revenue, and requires repayment by the end of the financial year. The provision also restricts repayment through specified promissory/securitisation forms. If this balance on page 197 is a Section 38 advance, to which the auditors expressly disclosed Section 38 non-compliance on page 145, the connection between the outstanding advances, the 2024 securitisation and the exact audit finding must be reconciled immediately against the full audit report. In any case, why is the Bank column missing?

Earnings Management

Page 173-DFERA and deferred liquidity management cost: This is another key page. It says that DFERA accumulates specified FX and derivative related revaluation amounts and may be recognised as an asset or liability. More importantly, the CBN states that some liquidity management costs, including interest expense on open market operations, may be deferred as an asset and amortised for up to four years. The forensic questions are fundamental: What economic resource does the deferred amount represent? How much was capitalised in 2025? What would 2025 profit have been if the expenditure had been expensed immediately? Who approved each deferral? What is its recoverability basis? This policy creates a clear potential for timing-based earnings management.

Page 176 Statutory transfer and CBN instruments: The accounting policy states that where additional liquidity management expenditure increases by 30% or more over the prior year, the interest expense shall not be recognised in Statement of Profit or Loss but deferred and recognized in the Statement of Financial Position as Other Asset and amortised for a period of up to four years. This threshold-driven recognition rule deserves intense scrutiny because the recognition timing depends partly on the magnitude of spending relative to the prior year, not merely on the underlving economic nature of the expenditure. The “interest expense” will also take on a new dress and be called “Other Asset”. The complete 2025 deferred cost calculation is essential.

Page 193-Deposits, CBN instruments and currency in circulation: CBN instruments outstanding increased from approximately 24.270 trillion to 48.703 trillion. The movement contains about N74.338 trillion of issuances, 41.560 trillion of redemptions and an 8.345 trillion line described as “deferred interest and cost.” This N8.345 trillion line should immediately be reconciled to the page 176 policy permitting deferred liquidity management expenditure and to the N5.275 trillion CBN instrument interest expense on page 180. Determine whether the N8.345 trillion is merely unamortised discount/transaction cost inherent in amortised cost accounting or includes the special policy of postponing expense recognition. What happened to the N11.885 trillion deferred in 2024? This distinction is capable of creating a major effect on reported profit and assets.

c) Deceptive accounting practices

Page 136 There are no “Other National Disclosures” in the Summary Financial Statements: Value Added Statement and 5-Year Financial Summary. These are important information Statements, but the CBN did not include them in the 2025 Summary Consolidated and Separate Financial Statements. This was also the case in the 2024 CBN’s Summary Financial Statements.

Page 138-The CBN’s report to the Board compared the results of 2025 with the numbers of 2024 despite their assertion that the numbers are not comparable (Page 157).

Page 142-Governor’s ICFR certification: The Governor certifies, among other things, that the report contains no material untrue statement or omission, that the financial information fairly presents financial condition/results/cash flows, that controls have been evaluated and that no significant deficiencies or material weaknesses were identified. The certification also refers to financial statements prepared in accordance with “generally accepted accounting principles.” Because page 157 identifies the specific basis of preparation of the Financial Statements as the CBN Financial Reporting Manual, management should define precisely what “generally accepted accounting principles” means in this certification. Where are the key Audit Matters (KAM)? Where is the joint auditors report on the 2025 Consolidated and Separate Financial Statements?

The Governor is the head of the CBN as an entity; the “Internal Audit department” reports to him, the “Internal Control and Compliance department” reports to him (see Page 4). He issued the certification of management assessment on Internal Control over Financial Reporting and declared that it is effective (Pages 142 and 144). The Governor is the Chairman of the Committee of Governors (Executive Management) that sat to decide and thereafter approved the unique CBN Accounting Manual that was used to prepare the Financial Statements – Page 146 (that are not comparable to prior year – Page 157). He is also the Chairman of the Board that sat to approve the Financial Statements and to also receive the External Auditors’ report on the said Financial Statements (Pages 145 and 149). Where is Corporate Governance in all of this?

Page 138, Page 140 and Page 146: The CBN says that the Financial Reporting Manual that they used to prepare the summary financial statements was approved by the Board of the CBN and the FRC (Page 138). In another breath, they claimed that the Manual was issued by the FRC (Page 140). The joint auditors say that it was a framework approved by the Executive Management that was used (Pages 145 and Page 146).

Page 147-Statement of profit or loss: The year-on-year movements are extraordinary. Group credit loss expense increases from 44.624 billion to N718.093 billion; settled derivative losses collapse from approximately 13.883 trillion to 21.555 billion; other operating income falls from 12.921 trillion to N3.059 trillion; other operating expenses increase from 312.669 billion to 1.662 trillion. Despite these swings, Group profit rises to N136.438 billion. Because page 157 says the years are not comparable, management should produce a bridge separating economic changes from accounting framework changes for every material line. Currency issue expenses of 579.208 billion is supposedly broken down in Note 10 (Page 181). There is no breakdown on Page 181 except story line which was also the case in the 2024 CBN’s Summary Financial Statements.

Page 181 – Other income and operating expenses: Other operating income includes a 1.795 trillion fair value gain on gold bullion and approximately 1.071 trillion of unrealised FX revaluation gain. Other operating expenses include approximately 1.243 trillion described as “monetary and financial stability expenses.” That category is extraordinarily material yet highly aggregated. A forensic schedule should identify every major item within the 1.243 trillion showing beneficiary, purpose, authority, procurement process, date, supporting contract and whether any amount relates to quasi-fiscal intervention or deferred liquidity expenditure.

Page 4, Page 137, Page 138, Page 139, Page 141 and Page 149: Page 137 disclosed that Bala M. Bello was the Deputy Governor (Operations) and exited the CBN on 11 March 2026. Page 4 disclosed that the Finance department and the Risk Management department (Pages 4, 138 and 139) are under the Operations Directorate. Why is it that the “Summary Consolidated and Separate Financial Statements” was signed by the Deputy Governor (Economic Policy), Mohammad Sani Abdullahi, on 26 February 2026 following the Board’s authorisation when Bala M. Bello was still in charge of the Operations Directorate? (Page 141 and 149). The only plausible reason is that the signing of the Financial Statements was backdated to 26 February 2026. The forensic questions here are; who changed the corporate information page after authorisation, under what version-control process, and whether the auditors reviewed the final published document containing the change before the joint external auditors signed off in June 2026. This is an integrity issue (Page 139).

Page 180 Overdraft facility granted to the Federal government in 2025: The disclosure in Note 3a(i), on Page 180 on the above matter; questions the CBN executive management’s application of Section 38 of the CBN Act, 2007 and the processes for extending temporary advances to the FGN. First, the CBN extended overdraft facility to the FGN in 2025 to which the applicable interest rate cannot be zero percent because the CBN policy on “the effective interest rate method” is not zero for any debt instrument (Page 160). The overdraft extended is a total of N2,976,922,000,000 (approximately N2.977 trillion) as seen in Note 17 on Page 186 (Overdraft due from FGN). It is deceptive to have said that the applicable interest income is NIL (Page 180) and disclose that an advance was made to FGN by the Group on Page 197 but, omit the column for the Bank so that it will not show that it was the CBN that extended it; as it will be illegal (if the CBN is to comply strictly with the provisions of Section 38 (3)(a) of the CBN Act, 2007 which states “…the power of the Bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid” and the FGN has outstanding that is yet to be repaid. Second, since the CBN extended overdraft facility to the FGN in 2025, it means that they did not accrue any interest income on the loan of approximately N2.977 trillion; which is supposed to have been calculated at MPR +3% (if they used the rate they applied in the 2024 summary financial statements). Accordingly, the figure for “interest and similar income calculated using the effective interest method” on Page 147 is understated and incorrect and the CBN accounting policy on Sovereign Expected Credit Loss (ECL) assumption of Zero (Page 178) becomes unsubstantiated. A zero outcome can arise from a properly supported ECL calculation but, a broad institutional presumption deserves challenge especially when one observe the FGN exposures, historical arrears, restructuring/securitisation history and when the precise evidence rebutting any non-zero loss expectation by the CBN is non-existent. Third, the processes for obtaining overdraft facility from the CBN by the FGN involve institutional layers which include the Office of the Accountant General of the Federation, Federal Ministry of Finance, Office of the Secretary to the Government of the Federation, Federal Executive Council, Committee of Governors and the Board of the CBN. Accordingly, the documentation involved in granting the overdraft facility is expected to be held in compliance with applicable legal requirements. It is therefore troubling that the CBN 2025 summary consolidated and separate financial statements will state a NIL outcome regarding the N2.977 trillion.

Page 144 The CBN states that “Ernst and Young and KPMG Professional Services’ limited assurance report appears on pages 145 146 of the consolidated and separate financial statements”. They know that the said financial statements was not released to Nigerians. They also know that the referred pages are not included in the summary consolidated and separate financial statements that was made public. It is misleading.

d) Auditor Independence

Page 198-Subsequent events and auditors’ non-audit services: The report treats the new tax laws effective 1 January 2026 as non-adjusting events and says no other material subsequent event required adjustment/disclosure. More significantly, it reports that KPMG and Ernst & Young each performed “Internal Control over Financial Reporting” non-audit services for the CBN and each firm received 50 million, while the same firms also provided limited assurance on management’s ICFR assessment on page 146 where they also stated clearly that the said ICFR assessment is not even included in the summary Financial Statements anyway (and compare this to page 138 assertion by management). This does not. by itself. prove an auditor-independence violation because the exact scope of the non-audit work and the ICFR report are not provided. But it creates an obvious self review threat question: Did either auditor design, implement or operate controls that it subsequently assured?

Page 145 and Page 146: The joint auditor did not disclose the exact date that they signed the full financial statements to which they expressed unmodified opinion with emphasis of matters on non-compliance with Section 38 of the CBN Act and basis of accounting.

The questions to ask are: Will CBN accept this kind of Financial Statements from any of the Deposit Money Banks? Will the joint auditors have issued a different opinion and/or allowed this kind of financial statements from any of their clients other than the CBN? Is the CBN now allowed to issue Accounting Standards for itself and alter them at will? Is the CBN no longer a public institution? I hereby recommend that every Nigerian university and professional organisation, that teaches/profess Accounting, should download this CBN 2025 summary consolidated and separate financial statements and hence use it as a case study to teach Deceptive Accounting, Fraudulent Financial Reporting, Weak Corporate Governance, Earnings Management and Auditor Independence. The National Assembly can rely on Sections 88-89 of the 1999 Constitution (as amended) to raise their questions.

At the FRC however, I would like to advise the Council to request the CBN to forward the summary and the full audited financial statements to you, as a matter of urgency, for review and thereafter recommend that the said financial statements be withdrawn and restated, to give “true accounts” as provided for by Section 8 (1)(b)(i) of the First Schedule of the CBN Act, 2007 except my observations are not found in the said 2025 summary consolidated and separate financial statements of the CBN.

Finally, the second issue, I have read in the open-source media that the National Assembly has been expressing concern over the sum of N210 trillion in the financial statements of the Nigerian National Petroleum Company Limited (NNPCL). I had expected the National Assembly to refer the matter to the FRC. If they have not, I believe that the management of the FRC should by themselves demand for these financial statements from the NNPCL, review them and give Nigerians a proper closure.

Once again, I thank you for counting me worthy of this honour and wish the Council greater success ahead. Long live the Federal Republic of Nigeria. May God bless us all.

OBAZEE, Jim Osayande

01 September 2026

Click here to view the CBN 2025 Summary Consolidated & Separate Financial Statements

(Inside Business Online)