IFRS: FRC readiness test reveals widespread non-compliance

on   /   in Business 12:04 am   /   Comments

By JONAH NWOKPOKU

Financial Reporting Council, FRC readiness test for the implementation of the International Finance Reporting Standard, IFRS, has revealed widespread non-compliance among public and private organisations.

The Chief Executive Officer  of FRC, Mr. Jim Obazee, disclosed this to newsmen at a media briefing in Lagos on the review of IFRS readiness test that was carried out by the council.

He said that the IFRS readiness test conducted by the council in 2013 revealed a widespread   non-compliance among the organisations that participated in the test.

He said that only 72 out of 190 listed entities, 38 significant public interest entities and three government business entities submitted requested documents to the council.

He added that the level of non-compliance maybe repeated in the phase two of the national road map for 2014 in the implementation of the IFRS in Nigeria.

According to him, “We have just finished collecting relevant documents from entities in phase two in the national road map. It is sad to report that only 345 entities submitted requested documents. All government business entities are expected to submit their financial reporting documents under this category, however, only ten government entities submitted their documents to the council.”

He listed the companies to include: “Corporate Affairs Commission, CAC, Nigeria Deposit Insurance Commission, NDIC, Asset Management Corporation of Nigeria, AMCON, National Insurance Commission, NAICOM, Nigeria Liquefied Natural Gas, NLNG, and NLNG Manning Ltd. Others include: Niger Delta Petroleum Resources Limited, Niger Delta Properties Ltd, Niger Delta Gas Ltd, and Niger Delta Exploration and Production Plc.”

He however attributed the widespread non- compliance by government agencies to poor monitoring of financial reports.

He noted, “Government Business Entities’ financial reports are poorly monitored and that is what is giving room for poor financial reporting amongst a large number of them. The council is requesting attestation of the financial statements of all Government Business Entities and the resultant sanctions shall assist the country in keeping faith with the ongoing fight against corruption.”

He explained that the council has started, “to review the submissions and sanctioning non-compliance with IFRS readiness test,” noting that following the expiration of the official date for submission which was January 31st, 2014, all the other entities under the phase would be given a 30 day ultimatum to submit the documents or face severe sanctions.

He further disclosed that, “Other than Deposit Money Banks, other financial institutions have weak financial reporting as a significant number of them did not pass the IFRS readiness test.”

He also said that except for NAICOM’s effort, not more than twenty insurance companies would have been able to submit their 2012 financial statements, prepared using IFRS, to NSE.

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