NASB clamours for independent regulation of financial reporting

By Peter Egwuatu
The Executive Secretary of Nigeria Accounting Standards Board, NASB, Mr. Godson Nnadi, has emphasized the need for the establishment of an independent accounting and auditing standard setting body for Nigeria and other African nations.

Speaking in a paper titled In support of the private sector led- growth agenda, Nnadi, who led the Nigerian delegation to the 2010 Africa ROSC A&A Round-table conference recently in Addis Ababa, Ethiopia, stressed that the setting up of an accounting and auditing standards body devoid of undue government interference would enable Nigeria and other African countries attain critical economic development goals that will liberate their citizens.

He outlined some of the challenges currently faced by NASB, stressing that adequate funding by government and other stakeholders would assist the body to stem the high labour mobility among its technical staff.

The NASB boss also regretted the inadequate number of technocrats due to the financial constraints facing most standard setting bodies in most countries, stressing that the conference which had the objective of strengthening financial reporting in Africa will be of immense benefit to participating countries.

While commending the non-partisan structure of the Nigerian board, Nnadi contended that an enlarged, unified, and common financial regulator would be quite invaluable in meeting the needs of African countries as in the cases of United Kingdom and Australia.

He told participants at the conference that Africa and indeed Nigeria requires a comprehensive statutory accounting and auditing standard setting body as opposed to self regulation which runs largely on moral suasion.

He noted that having evaluated the way stakeholders in the sector handled financial reporting functions on the continent, the World Bank felt it was imperative for stakeholders to compare notes to be able to arrive at point that would help them compete with their peers from other parts of the world in matters relating to financial reporting.

Nnadi stated that the idea of the meeting was largely informed by the need to achieve a higher degree of investor protection and independence of financial regulators in Africa.

“The World Bank is serious about it and has restated its willingness to assist Nigeria in every way possible to ensure that financial reporting practice in the country conforms to international best practices”, he stated.

He was of the opinion that although the two professional accounting bodies- The Institute of Chartered Accountants of Nigeria (ICAN) and Association of National Accountants of Nigeria, (ANAN)- can regulate their members in various ways, the World Bank’s advocacy for an independent body to regulate financial reporting in the country was still necessary and most appropriate.

Ahead of the impending passage of the Financial Reporting Council (FRC) Bill now before the National Assembly, the NASB chief executive commended the World Bank for providing technical assistance for Nigeria and other African countries to attain the global threshold in financial reporting.

Meanwhile, the World Bank Country Director for Ethiopia, Mr. Kenichi Ohashi, hinted that the organization was willing to provide the much needed technical assistance to stakeholders on the continent to upgrade their financial reporting skills to international standard.

Ohashi stated that the 2-day meeting tagged Africa ROSC A&A Roundtable Conference, was a platform designed to share their experiences on current financial reporting measures with a view to improving their standards.
He confirmed the World Bank’s preference for independent financial reporting regulators for African countries.