Financial Reporting Council of Nigeria (FRC), a Federal Government agency has said it will establish a functional seven directorates as indicated in its Financial Reporting Act Section 23.
Rabiu Olowo, CEO of FRC said this on Wednesday at a media roundtable themed ‘FRC & The Renewed Hope Agenda for a stronger economy’.
According to section 23 of the FRC Act as amended stipulated seven directorates for the council, unfortunately after 22 years of the establishment of the council, only five out of the seven directorates are functional.
“We will establish all the statutory directorates mandated in our act,” Olowo said. In line with our transformation agenda, we will have the full component of the directorate in the first quarter of 2024 as stipulated in the Act,” he said.
The Financial Reporting Act Section 23 as seen by BusinessDay, states that “The Council shall, for the purpose of this Act, establish the following Directorates and any other Directorate the Council may deem necessary— Directorate of Accounting Standards-Private Sector; Directorate of Accounting Standards-Public Sector; Directorate of Auditing Practices Standards; Directorate of Actuarial Standards; Directorate of Inspections and Monitoring; Directorate of Valuation Standard; and Directorate of Corporate Governance.”
Olowo, opined that the council is engaging with relevant stakeholders for the establishment of the directorate of valuation standards and also the directorate of actuarial standards.
Emmanuel Otitolaiye, the chief financial officer of Linkage Assurance said the establishment of an actuarial and valuation department is key, while citing the insurance industry which is adopting IFRS 17 with effect from December 31, 2023.
Deloitte said in a note that IFRS 17 establishes the principles for the recognition, measurement, presentation, and disclosure of insurance contracts within the scope of the standard.
“The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those contracts,” Deloitte said, adding that this information gives a basis for users of financial statements to assess the effect that insurance contracts have on the entity’s financial position, financial performance, and cash flows.
“The scarcity of actuaries in the industry is quite overwhelming, we lack them, and their services are required. Not only in insurance valuation but also in the aspect of pension where we need an actuary to do valuation,” Otitolaiye stated.
Sa’ad Abdulsalam, head of financial standards and corporate governance at the Security Exchange Commission said there is a need to have a robust framework for information sharing.
“We should not be hoarding information, as the Financial Reporting Council shares information with us, we should also share certain information with the Financial Reporting Council. Let us institutionalise it, let us have a framework,” he said.
Babajide Ibironke, chief financial officer at Abuja Electricity Distribution Company said there should be collaboration in capacity building. There are some technical issues in different industries and by collaborating we can share the issues with the Financial Reporting Council to see how reporting can be done in light of the issues.
Olowo, the CEO of the Financial Reporting Council of Nigeria said the task is to transform the FRC into a new, robust, vibrant, independent, and high-performing regulator comparable with any of its kind globally.
He said numerous entities and government agencies have fallen short of the high standard expected under the FRC Act 2011.
“The bedrock of our transformation agenda going forward is to ensure maximum compliance with the FRC Act 2011. We will no longer sleep on our rights, the FRC intends to give full credibility to any financial statements coming out of Nigeria in a way that investors can rely on information from those financial statements,” Olowo said.
