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The Nigerian
Accounting Standards Board (NASB) has called for the passage of the
Financial Reporting Council Bill by the National Assembly.

The passage of the
bill would empower the board to implement the International Financial
Reporting Standards (IFRS), which Nigeria has already adopted.

The IFRS is expected to be implemented over a three year period with effect from January next year.

Executive secretary
and chief executive of the NASB, Jim Obazee, said while the board
strives for global relevance in the country’s financial reporting
system, it is handicapped to enforce compliance.

“The right
equipment we need for the implementation of the IFRS in Nigeria
includes the passage of the Financial Reporting Council (FRC) Bill.
Otherwise, we may have to identify every piece of legislation, mostly
in the Companies and Allied Matters Act i1990 that are inconsistent
with the pronouncement of IFRS,” Mr. Obazee said.

Cumbersome process

The FRC Bill, which
was passed by the former National Assembly, was not accented to by
President Olusegun Obasanjo. The failure of the successor, the late
Umaru Yar’Adua to sign the Bill three months after assuming office
meant that the Bill had to go through fresh legislative process.

It was again passed
by the House of Representatives in 2008, while it awaited the Senate to
consider the committee report. Before the recess on March 9, the
committee report was listed thrice in the notice paper by the Senate
but it eventually did not come up for consideration before the
lawmakers vacated.

According to the
NASB, the passage of the Financial Reporting Council Bill will help to
address the current institutional weaknesses in the regulation,
compliance and enforcement of standards, and the development of robust
arrangements for monitoring and enforcing compliance with financial
reporting standards.

Mr. Obazee said
Nigeria stands to receive increased Foreign Direct Investment (FDI)
when the bill is passed. “Nigeria will be included in the list of third
country auditors, as unveiled by the European Union. As such, our
professional accountants shall be allowed to audit companies that have
subsidiaries in the EU without limit,” he added.

According to him,
the desired public sector financial management reforms will be realised
with the development of public sector accounting standards, which shall
be issued by Financial Reporting Council.

Enhancing market discipline

The Central Bank of
Nigeria (CBN) governor, Sanusi Lamido Sanusi, said recently that the
current accounting system by Nigerian institutions was not in line with
global standards, hence the introduction of the IFRS.

“This is expected
to enhance market discipline, and reduce uncertainties which limit the
risk of unwarranted contagion,” Mr. Sanusi had said.

IFRS are
principles-based standards, interpretations, and the framework adopted
by the International Accounting Standards Board (IASB). Nigeria is
implementing an agenda for the adoption of IFRS by all reporting
entities commencing in January 2012 through January 2014.