Nigeria Content Online

The World Bank
Group says it is working towards promoting the application of
international accounting standards in the country in a bid to
institutionalise greater transparency in financial reporting in the
banking and financial sectors of the economy.

The International
Finance Corporation (IFC), the investment arm of the World Bank, is to
collaborate with PricewaterhouseCoopers LLP, a corporate accounting and
finance consulting firm, to educate practitioners on the need to adopt
the accounting standards to enhance greater transparency in financial
reporting in the country, and allow Nigerian companies meet the
disclosure requirements of international investors.

IFC, which is the
largest global development institution focused on the private sector in
developing countries, is involved in efforts to create opportunities
for people to escape poverty and improve their lives by providing
financing to help businesses employ more people and supply essential
services.

Awareness and understanding

Managing partner,
PricewaterhouseCoopers, Ken Igbokwe, said in a statement that more than
80 banking and financial sector practitioners recently participated in
a one-day seminar in Lagos to help improve awareness and understanding
of the issues involved with adopting new International Financial
Reporting Standards (IFRS).

According to Mr.
Igbokwe, the impact of IFRS goes beyond reporting by accountants, and
covers all standards for measuring business performance, adding that
this makes it important that line managers understand its effect on the
internal and external reporting of the operations and performance of
the business.

IFC country manager
for Nigeria, Solomon Adegbie-Quaynor, said embracing the IFRS was
important to assist the financial market in preparing for the process
of change and to realise the importance and benefits to be derived from
increased transparency in financial reporting.

Removing subjectivity

Identifying the
benefits, Mr. Adegbie-Quaynor said apart from helping to remove some
subjectivity from financial reporting, the IFRS provides a consistent
basis for recognition, measurement, presentation, as well as disclosure
of transactions and events in financial statements, pointing out that
the challenge is in getting not only accountants, but other operators
in the banking and financial sectors, to adopt them in their operations.

“As more African
businesses operate internationally, it is important for investors to be
able to compare companies under similar standards in all countries
where they operate. Greater transparency, which these standards will
bring, is likely to attract increased investment into Nigeria,” he said.

Besides, he said,
local companies seeking dual listing in other countries will find IFRS
easier to comply with reporting requirements of overseas stock
exchanges, while governments will be in a better position to assess the
tax liabilities of multinational companies receiving income from
overseas, as well as for foreign multinationals setting up shop in
their own country.