Securities Commission worry over companies’ non-migration to global financial reporting standards

Mournir Gwarzo - Chairman Security and Exchange Commision

More than 40 per cent of all public companies in the country’s capital market are yet to migrate to the International Financial Reporting Standards in their operations.

The reporting standards, issued by the International Accounting Standards Board, are a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements of quoted companies.

The standards uphold the global tenets of corporate transparency and accountability in the accounting processes of companies, particularly concerning anti-corruption.

The acting Director General of the Securities and Exchange Commission, Mounir Gwarzo, is worried that most public companies in Nigeria were reluctant to embrace the benefits associated with the reporting standards.

Mr. Gwarzo told members of the Association of Reporting Accountants in the Capital Market who visited him in Abuja, on Tuesday that most the companies operating in the Capital Market were yet to fully migrate by adopting the standards in the operations.

“Last year (2014), almost 40 or more per cent of the companies were yet to migrate to IFRS,” he said.

He said the Commission was considering plans to run a training programme for these companies in collaboration with the Reporting Accountants’ Association.

The Commission, he said, was facing some challenges with some of these companies migrating to IFRS, pointing out that it would be ready to work with the Association to ensure a smooth transition.

On the appeal by the Association to make it mandatory for accountants and auditors to join its fold, Mr. Gwarzo said the Commission lacked the powers to force any group or individual to belong to trade groups.

He, however, assured that the SEC would do all within its powers to encourage interested people to join trade groups.

Henceforth, Mr. Gwarzo said the SEC would use firms that belonged to a particular trade group, adding that this was one of the ways to encourage people to join trade groups.

He restated the desire of the Commission for all the major disciplines in the capital market to have their associations, adding that allowing trade groups to resolve issues before they escalate would allow the SEC to be more focused in discharging its responsibilities as the main regulator of the Capital Market.

The Chairman of the Association, Ayodele Othihiwa, said although reporting accountants have a role to play when new transactions were being conducted, the auditors were more important in creating transparency.

This, he explained, was significant, in view of the fact that the financial statements the auditors sign off on were major information to operators in the capital market.

According to him, one of the things happening generally, following the global financial crisis, was the new challenges to the kind of report the auditor issues.

“You know our typical report looks at our responsibilities and then concludes by saying that we believe that the account gives a true and fair view,” he noted.

He therefore called for collaboration with the SEC in the area of capacity building for the market

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