FRC in anxious wait for financial statements of buyers of bridge banks

For buyers of Enterprise Bank and Mainstreet Bank, the bridge banks, it is important to know that the Financial Reporting Council (FRC) is expecting to see their financial statement by the end of next year.

Furthermore, there will be no waiver for organisations that have not sent their 2013 financial statements to the FRC, as they will be required to submit it even when others have concluded on their 2014 financial statements.

“Don’t forget that by next year, we are all waiting for 2014; we will be asking for 2013 financial statements. If you have not submitted 2013 financial statement, you will be subject to penalty of so, so amount,” Jim Obazee, executive secretary/CEO of FRC, said at a three-day meet the press retreat for business editors and finance correspondence in Lagos.

For buyers of the bridge banks, it is important to know that FRC is expecting to see their financial statement by the end of next year.

One of the questions asked during the retreat was to know whether the FRC played any role during the sale of the bridge banks going by its objective of protecting investors and other stakeholders interest. The answer was on the negative, but Obazee made it clear that the FRC will come in when the owners submit their financial statements, it is then that whatever they are doing would be revealed.

The buyers of the two bridge banks that were sold by Asset Management Corporation of Nigeria (AMCON) are Heritage Bank, which is now the owner of Enterprise Bank and Skye Bank that bought Mainstreet Bank.

Other objectives of the FRC include to give guidance on issues relating to financial reporting and corporate governance to bodies listed in sections 2 (2) (b), (c) and (d) of the Act; ensure good corporate governance practices in the public and private sectors of the Nigerian economy; ensure accuracy and reliability of financial reports and corporate disclosures, in pursuant to the various laws and regulations currently in existences, and harmonise activities of relevant professional and regulatory bodies as relating to Corporate Governance and Financial Reporting.

FRC has declared 2015 as the scorecard on the adoption of IFRS in Nigeria. The Council said it would commence audit quality inspection, adding that it was currently seeking membership of the International Forum of Independent Audit Regulators (IFAR), which will be a booster to the capacity of the Council to monitor audit quality.

According to Obazee, the national Code of Corporate governance will be operational in the first quarters of 2015. This, he said, will also strengthen the compliance with Section 44 (3) of the FRC Act and enhance the inflow of Foreign Direct Investment and steer greater interest from local investors.

The required platform for the implementation of Internal systems/Information systems control with independent attestation, in accordance with Section 7 of the FRC Act, shall also be laid, he said.

“We are also confident that the much awaited IFRS Academy shall at the last commence its operation. The implementation of the International Public Sector Accounting Standards (IPSAS) by Governmental Funds shall be a priority,” he said.

He listed some corporate governance key challenges to include insider dominated boards, both in the public and private sectors, non-independent or affiliate corporate boards, absence of minority voice on boards minorities helplessly widely dispersed, very inadequate Minority Shareholder Protection (MSP).

Other challenges are significant resistance to the concept of independent non-executives, inadequate board monitoring and supervision of the executive, Compromisable External Audit Function, Compromisable and ineffective Audit Committees, Easily repressible Internal Audit Function and Easily repressible Chief Governance Compliance Officers.

HOPE MOSES-ASHIKE