Nigeria Content Online

All efforts to stimulate direct foreign investment in Nigeria may not yield any fruit until the country adopts international standard for financial reporting, said the Association of National Accountants of Nigeria (ANAN).

The view was expressed at the association’s ongoing Mandatory Continuing Professional Development (MCPD) programme, holding in Lagos.

The theme for the programme, as disclosed by the association’s national president, Iyamide Gafar, is ‘Standardisation and Accounting Ethics’, where five topics will be discussed. The topics, according to the chairman of Lagos branch of ANAN, if ingrained as practice principles, will help checkmate corrupt practices in Nigeria.

The topics are: Financial Reporting Standards; The Process of Standards Setting and its Effect on Financial Reporting; Professionalism and Ethics in Accounting; Due Process Mechanism and Reporting, and Financial Reporting in the Public Sector.

Current reporting standards

While presenting a lecture on financial reporting standards, Paul Adejona berated current standards for reporting financial statements in Nigeria, describing it as fictional. Specifically, he said financial statements, as reported in Nigeria currently, are not capable of revealing the precise financial health of organisations because issues like inflation and risks, which matter a lot to business operations, are not reported.

“Other countries like Brazil and Netherlands have a way of reporting effect of inflation in their financial statements but in Nigeria, there is yet to be a provision for reporting inflation,” he said, attributing this backwardness to low influx of foreign investments in Nigeria.

“No wonder these foreign investors that are coming with their hard currencies are still finding it difficult to invest in Nigeria because they have concluded that our financial statement is not effective enough and it is porous,” he said.

He advocated the adoption of international financial reporting standards because the standard of reporting financial statements in Nigeria allows external auditors to post a clean bill of health on a company’s financial statement while in reality, calamity and failure are knocking.

“There is no proper time that we need to adopt this international reporting standard than this period we are now,” he said.

He found it ludicrous that there are different reporting standards, some of which are obviously obsolete, when in actual fact, credit and debit mean the same thing everywhere in the world.

Adopting the international standard, he said, will not only help Nigeria’s industry, but will also enable Nigerian accountants to practice their profession anywhere in the world.

Nigeria needs a radical leader

Benjamin Jenfa, the chairman of the event, said the role played by ANAN in the country exemplifies why Nigeria needs a radical leader.

He said late general Sanni Abacha labelled the association’s executives as radicals at a meeting with him.

“He told us we write too much and that as we write, he keeps dumping our reports under the table,” he said.

But the late president advised them to keep writing because “a day is coming when Nigeria will have a radical president that will implement your reports.”

While calling for greater boldness from Nigeria’s political leaders to implement stringent accounting practice principles, he was, nevertheless, grateful to former president, Olusegun Obasanjo, for implementing some of the recommendations of ANAN.