Breaking News
Translate

Emergency rule (for chartered accountants)

Kindly Share This Story:

Bashorun JK Randle
IT is all over the internet that the President of the Institute of Chartered Accountants of Nigeria, ICAN, has called on the President of Nigeria and Commander-In-Chief of the Armed Forces, Dr Goodluck Jonathan, to declare a state of emergency over the accountancy profession in Nigeria. It is a bombshell!!  It has some viral.

What prompted me to double-check with the Presidency of Nigeria is that Mr President has a huge pile of problems to contend with – not the least of which is that this year, our universities will graduate about 600,000 students; and when you add those graduating from technical colleges/polytechnics as well as other tertiary institutions, the figure is approaching one million without adding those from unregistered/unapproved colleges. But where are the jobs and who is going to employ them – even after they have completed their Youth Service Corps programme?

Kabir Alkali Mohammed
Kabir Alkali Mohammed

On top of that we have lawyers and chartered accountants who have no jobs at all or are merely hanging on to precarious employment. Anyway, according to Julie Assange of Wikileaks and Edward Snowden (The CIA” Leaker”), what the President of ICAN actually said was as follows: “The National Assembly should promulgate a law to ensure that Nigerian auditing firms (e.g. JK Randle Professional Services) are given priority in the market.

It is important that Nigeria should emulate countries such as India and South Africa which have legislation that give priority to local firms (as opposed to the “Big Four”) in the auditing of organizations, especially multinationals and listed companies.  I agree that ICAN should make concerted efforts to encourage auditing firms who are not within the “Big Four” largest firms.

It is not fair for the Institute not to give local firms the support they require. The support would be rendered in a way that would confer the same kind of statutory recognition which prevails in other countries.  In South Africa, they have a strong administration which recognizes that local firms must be given some element of priority.

This is an issue on which the Council of the Institute of Chartered Accountants of Nigeria (ICAN) should focus.  That support must be duly accorded.  Indeed, it will be given top priority under my administration (and tenure) as President of ICAN.”

We have a choice – to check with the Presidency of Nigeria or the website of the ICAN presidency or await a rebuttal. In the meantime, what is self-evident is that a great deal of grievances have been simmering for a very long time – on the part of local firms of chartered accountants against the pre-dominance dominance, and over-dominance of the four largest international accountancy firms in the Nigerian market almost to the exclusion of all others in key segments:

•Banks

•Oil and Gas

•Telecommunications

•Pension Funds

•Insurance

•Multinationals

•Publicly quoted companies

•Major government agencies

To further compound matters, local firms allege that all the regulatory agencies for banks; insurance; oil and gas; telecommunications, capital market, etc. are audited by the “Big Four”.  The local firms have drawn my attention to the distribution and allocation of consulting assignments.

It is really murky to say the least especially when it would appear that some firms are rendering both auditing and consulting services to the regulators and those they are required to supervise.

Rather than be drawn into the turbulent fray, many of us feel obliged to limit our intervention to offering advice and counseling for voluntary restraint but to no avail.  Here, I must declare my interest as I served with KPMG for thirty-four years but received neither, gratuity nor pension!!  That is a story for another day.

What is far more relevant is that during my eleven years as Chairman & Chief Executive of KPMG Nigeria as well as my stint as Chairman of KPMG Africa and member of KPMG International Council, my colleagues and I were very sensitive to the plight of the local firms and the need to assist them with regard to capacity building as well as technical skills.

BESIDES, we poached neither their clients nor their staff.  On the contrary, we strove to engage them in joint audits during the course of which information, documentation and processes as well as technical expertise were shared freely and in utmost confidentiality. Beyond that, whenever we hosted experts from our international network we would invite our professional colleagues to participate in the knowledge sharing.

Indeed, I must emphasize that it was not only KPMG but virtually all the other leading firms – Coopers & Lybrand (now part of PricewaterhouseCoopers), Pannell Fitzpatrick; Arthur Young Osindero (now Ernst & Young); Deloitte; Arthur Anderson; Akintola Williams, etc., that were engaged in the collective effort to emphasize the drive for professional excellence.

Ruthless competition and unsavoury rivalry were subjugated to the higher responsibility of ensuring that the quality of our work would pass muster when subjected to international scrutiny.  Without being unduly sentimental, we saw ourselves as friends and colleagues with a common bond – as custodians of public trust and professional integrity.

Consequently, we constituted the “Big Eight” Committee which consisted of the eight largest accountancy firms in Nigeria with the clear objective of upholding the highest standards of our profession – in terms of ethics, technical expertise, training and professional conduct as the lightening rod for reinforcing the Institute of Chartered Accountants of Nigeria.

It is a measure of the mutual respect and trust that prevailed that we not only met monthly (the participating firms took it in turn to host us), we carried out Peer Review amongst ourselves which entailed the swapping of our clients files/audit conclusions in an atmosphere of confidentiality.

Our common purpose was to ensure consistency in the quality of our audit work. We were also mindful that the standards to which we aspired would need to be cascaded down to the medium and small firms – right down to sole practitioners. Indeed, we were committed to ensuring that there was space for both the big and the small firms to thrive, without compromising their integrity.

Therefore, it was a severe and painful jolt when under the Military Government of General Ibrahim Badamasi Babangida, the Federal Government of Nigeria promulgated the ANAN decree on August 25, 1993 (by Decree 76 of 1993) which totally undermined ICAN’s authority and pre-eminence as regards the training of accountants. Hitherto, the regulating aspect of accountancy had been the exclusive function/domain of ICAN. Suddenly, the military had outmaneouvered us.

It did not stop there. The real shocker was yet to come!! Prince Bola Ajibola, who was Babangida’s Minister of Justice and Attorney-General of the Federation, was guest of honour at one of our diners when he rose to speak, only to deliver a bombshell. According to the Minister, there were complaints that some chartered accountants were in the habit of signing two different sets of accounts for the same client (for the same period).

Fraudulent activities

Hence, in order to check such fraudulent activities which were aimed at denying the Government of much needed revenue and duties, the report of auditors would henceforth be co-signed by lawyers!! The Minister’s allegation took us by surprise because for those of us in the big firms it was inconceivable that we would ever engage in such malpractices or fraudulent activities.

Unfortunately, waters became murkier when several Nigerian banks collapsed and allegations of complicity by their auditors were all over the media.

Equally damaging were allegations that some banks and other financial institutions kept different sets of books – one for the auditors and regulators and another one for the promoters/proprietors of the banks. It was a lethal weapon which the military government of General Sani Abacha deployed with brutal force to consign bankers, accountants, lawyers, and debtors into detention.

Kindly Share This Story:
All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from VANGUARD NEWS.

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.
Do NOT follow this link or you will be banned from the site!