The Financial Reporting Council of Nigeria List out Limitations of Accounting in Nigeria
The FRC, Executive Secretary/CEO, Obazee Osayande
FRC recognizes the inherent limits of accounting as currently published public interest entities.
The Financial Reporting Council, Executive Secretary/Chief Executive Officer, Obazee Osayande during the retreat with finance correspondents and business editors held at Hemitage resort, Akodo, Lagos.
Osayande said that the FRC, Act No 6, 2011 was established to address current institutional weakness in regulation, compliance, and enforcement of standards and development of robust arrangements for monitoring and enforcing compliance with financial reporting standards of Nigeria.
“The implementation of the Financial Reporting Council Act will lead to increased management credibility, more long term investments, lower cost of capital, improved access to new capital and higher share values”.
For investors and lenders, Osayande said FRC is use for better disclosure of relevant information for making sound investment decisions and risk assessment.
He said the FRC is meant to reshape the national risk management system that is capable of aligning government and private sector responsibilities, sanction misbehaviour of the management and cautions of public interest entities and increase board competences and responsibilities.
Osayande also noted that the current published accounting by public interest entities, are not equipped to reflect a company’s response to a wide range stakeholders concerns relating to their operations. Added that most financial statements do not capture the intrinsic value of an entity’s intellectual assets not their financial risk situation adequately captures by their balance sheets.
He said needed correlate standards like Accounting, Auditing, Valuation, Actuarial, and Corporate governance with approaches aimed at narrative disclosures, qualitative indicators for assessing process and performance and corporate governance systems that are effectively applied.
In 2013, FRC shall hold seminar for judges to discuss the wider implications of the act and expose the dangers of earnings management on the citizenry the learnt judges. Secondly, we go for the adoption of cash-based International Public Sector Accounting Standards (IPSAS) by government. Thirdly, we shall work closely with state and federal government on the review of the various financial management Laws/Acts to enable a smooth and seamless transition as applicable. Fourthly, the FRC shall issue of National Code of corporate governance which shall mandatory with independent attestation.
Osayande stress further the important of proper financial reporting infrastructure shall enhance the benefit to entities and others like:
The relief of poverty,
The advancement of education, polities, and science,