What it is
An audit is an independent check of the accounts by a licensed auditor. It happens once a year.
Quarterly reports come out within 30 days of the quarter, far too fast for an audit, so they carry the heading 'unaudited'. The bank's management and board stand behind them, but no outsider has verified them.
For banks in Nepal there is a second check: NRB reviews the annual accounts before the bank may publish them and declare a dividend. That review often forces extra provisions, so the audited full-year profit can be lower than the Q4 unaudited profit.
How it is calculated
Not a figure. The 'unaudited' label applies to the whole quarterly report; the audited annual report replaces the Q4 figures.
Worked on Nabil Bank Limited, FY 2082/83 Q4
NABIL's FY 2082/83 Q4 net profit of Rs 790.58 crore is the unaudited figure. The audited annual report, after NRB's review, may show a different number.
What good looks like
Small differences between Q4 unaudited and audited figures are normal. A large drop at audit, especially in profit or NPL, means the quarterly numbers were optimistic.
Watch out
- Do not treat Q4 EPS as final until the audited report and NRB approval.
- Dividend expectations built on unaudited Q4 profit are often trimmed.
- Restated prior-year figures appear in audited reports; compare like with like.
In Nepal
NRB's Procedure for Approval of Financial Statement Publication and Dividend Distribution, 2082 requires banks to submit annual accounts to NRB's supervision department for preliminary review before board approval, and allows publication only with the final audit report.
Questions
They can be revised. The audit and NRB review commonly adjust provisions, which changes profit.
After NRB's review and the auditor's sign-off, typically before the AGM later in the year.