The Financial Reporting Council of Nigeria (FRC) on Monday engaged with representatives of shareholders’ association on the implementation of the Audit Regulation towards a stronger regulatory regime for statutory audits and related services in Nigeria.
Generally, strong independent public oversight is required to help create and maintain trust in the work of auditors by providing safeguards for companies and investors in the capital markets.
Iheanyi Anyahara, the acting executive secretary, Financial Reporting Council of Nigeria (FRC) said, the engagement is geared towards having an enduring credible corporate reporting regime that enhances capital formation, growth and preservation.
According to Anyahara, equity and credit markets (Capital markets) are among the most efficient markets the world over but particularly in the economically developed world.
He posits further that one reason for the efficient operation of capital markets is the public availability of creditable financial statements to stakeholders and the confidence in these statements by investors as a basis for investment and credit decisions.
“In the past decades, events posing potential serious threat to the efficient functioning of these markets have been the growing incidence of fraudulent financial reporting. The investing public roundly blame the accounting and auditing profession. Of course, you are very much aware that there is therefore, constant beaming of spotlight on the financial reporting supply chain,” he stated.
Speaking further on the reason for the engagement, Anyahara states that in order to advance its agenda for the sustenance of a stronger regulatory regime for statutory audits and related services in Nigeria, inaugurated an Audit Regulations Working Group (WG) in October 2018 to advise and assist the Council on technical matters relating to the regulation of audit and assurance services.
Some of the shareholders present at the meeting said they were not satisfied with the regulations, especially the sanctions as they were no laws against them at the point of investing in shares.
“What we want is that they should erase the penalty and sanctions; the other option, if they can give us training, issue a certificate to us: we prefer it than going to register with FRCN and pay money,” said Olagoke Samson.
Accordingly, the shareholders posit that board audit committee and statutory audit committee is a duplication of function, hence they urged the FRC to reconsider its position, especially in regard to cost on companies.