2004年-世界发展银行全球_Nigeria___Accounting_and_Auditing_24页_652kb

ROSC A&A Report on Nigeria: Summary

Core Content

This report, prepared by the World Bank, evaluates the observance of accounting and auditing standards in Nigeria, as part of the joint World Bank and IMF initiative to assess compliance with internationally recognized standards. It highlights institutional, regulatory, and professional challenges that affect the quality of financial reporting and auditing practices in the country.

Main Findings

1. Institutional Framework

• Statutory Laws and Bodies: Nigeria has a multiplicity of laws and regulatory bodies for accounting, financial reporting, and auditing, leading to inconsistencies and overlapping responsibilities.
• Companies and Allied Matters Act (CAMA): This is the primary legal framework governing corporate financial reporting. It mandates the use of Nigerian Accounting Standards (SAS) and generally accepted auditing standards (GAAS), but SAS are not updated to align with current IAS/IFRS.
• Regulatory Bodies: The Corporate Affairs Commission (CAC), Securities and Exchange Commission (SEC), and Nigeria Stock Exchange (NSE) are key regulators. However, there is a lack of clarity in their roles and powers, especially regarding disciplinary actions.
• Banking Sector: The Central Bank of Nigeria (CBN) is the main regulator of banks and financial institutions. It requires audited financial statements for approval before publication, but outdated sanctions and limited capacity reduce effectiveness.
• Insurance Sector: The National Insurance Commission (NIC) regulates insurance companies, but enforcement mechanisms are weak, and compliance with standards is not adequately monitored.

2. Accounting and Auditing Standards

• Nigerian Accounting Standards (SAS): Based on IAS, but not updated. There are no equivalent SAS for many current IAS, leading to inconsistencies in practice.
• Nigerian Accounting Standards Board (NASB): Established in 2003, it has the legal authority to set standards but lacks sufficient resources and capacity to perform its role effectively.
• Auditing Standards: No Nigerian Auditing Standards have been issued. ICAN is mandated to do so but has not fulfilled this due to lack of capacity. International Standards on Auditing (ISA) are recommended but not mandatory.

3. Compliance and Enforcement

• Weak Enforcement Mechanisms: There is no effective mechanism to monitor and enforce compliance with accounting and auditing standards. The CAC, SEC, and NSE have limited capacity and suffer from corruption and poor recordkeeping.
• Audit Committees: While required by CAMA, their effectiveness is not assessed, and their role in monitoring financial reporting is unclear.
• Legal Sanctions: Although legal sanctions exist (e.g., fines, imprisonment, license revocation), they are not consistently applied, especially in the non-listed financial sector.

4. Professional Practice

• Dominance of ICAN: The Institute of Chartered Accountants of Nigeria (ICAN) is the dominant professional body in the audit sector, while the Association of National Accountants of Nigeria (ANAN) operates mainly in the public sector.
• Professional Ethics and Conduct: The Code of Professional Conduct for ICAN members needs updating and mandatory application. There is a perception that some accountants ignore ethical standards.
• Education and Training: Professional education has weakened over the past two decades. While ICAN’s entry requirements align with IFAC, there is a lack of practical experience assessment and insufficient IT content in the curriculum.
• Continuing Professional Education (CPE): CPE is compulsory but not effectively enforced, especially for members not in public audit practice. Many high-quality graduates are not choosing careers in accounting due to low financial rewards.

Key Issues

• Institutional Weaknesses: Overlapping regulatory roles, lack of harmonization, and outdated laws contribute to weak enforcement.
• Inadequate Standards: Nigerian standards are not fully aligned with international ones, leading to inconsistencies in financial reporting.
• Poor Compliance: Many companies, especially small ones, do not comply with financial reporting requirements, and sanctions are not rigorously applied.
• Professional Ethics: There is a need to strengthen the application of ethical standards in the accounting profession.
• Capacity Gaps: Both regulatory bodies and professional institutions suffer from limited resources, inadequate staffing, and poor infrastructure.

Policy Recommendations

• Establish an Independent Financial Reporting Council: To oversee the adoption, monitoring, and enforcement of IAS/IFRS-based financial reporting for public interest entities.
• Review and Simplify Financial Reporting Framework: Develop a simplified framework for small- and medium-sized enterprises (SMEs) to reduce complexity and improve compliance.
• Strengthen Enforcement Mechanisms: Enhance the capacity of regulatory bodies to monitor and enforce compliance with standards and regulations.
• Update and Harmonize Standards: Align Nigerian standards with IAS/IFRS and ensure that all relevant sectors (e.g., banking, insurance) have updated and enforceable standards.
• Improve Professional Education and Training: Integrate professional ethics and values into pre-qualification programs, update syllabi to reflect international developments, and ensure adequate resources for training and monitoring.
• Enhance Legal and Regulatory Frameworks: Clarify the roles and powers of regulatory bodies, especially in relation to disciplinary actions and standard enforcement.
• Promote Professional Indemnity Insurance: Encourage the adoption of professional indemnity insurance to protect auditors and enhance accountability.
• Address Corruption and Recordkeeping Issues: Implement measures to reduce corruption and improve transparency and recordkeeping within regulatory bodies.

Conclusion

The Nigerian accounting and auditing environment is characterized by institutional fragmentation, outdated standards, and weak enforcement mechanisms. These issues significantly impact the quality of financial reporting and the credibility of the audit profession. Strengthening the statutory framework, improving professional education, and establishing an independent oversight body are critical steps to enhance the observance of international standards and improve the financial reporting regime in Nigeria.