SEC sets up committee on companies‘ internal control systems


By Gbenga Agbana    Wednesday, 1 Sep 2010    


As part of efforts to strengthen the capital market structure, the Securities and Exchange Commission, has inaugurated an inter-agency committee to work out the modalities for the implementation of an effective control system for public companies.This is being done according to Section 63 of the Investments and Securities Act No.29 of 2007.


A statement from the SEC on Tuesday, said, “The Act states that ”an auditor of a public company shall, in his audit report to the company, issue a statement as to the existence, adequacy and effectiveness or otherwise of the internal control system of the public company.”Inaugurating the committee in Lagos on Friday, the SEC‘s Executive Commissioner, Operations, Ms Daisy Ekineh, told members of the committee that the internal control system of a public company was designed to provide reasonable assurance regarding the achievement of organisational objectives.


Ekineh added that it was also to ensure the efficiency and effectiveness, as well as the reliability of financial reporting and its compliance with applicable laws and regulations.She, therefore, told the committee, whose membership was drawn from across regulators and operators in the financial sector that its responsibility was very important in the ongoing reforms in the financial sector. According to her, a functional internal control system will come into effect its the successful completion of their task.


Ekineh said a functional internal control system would also ensure that Nigerian quoted companies were internationally competitive in terms of the attraction of foreign direct investment.Ekineh who was represented at the event by the Secretary to the board of SEC, Mr. Kennedy Aigbekan, outlined the terms of reference of the committee. According to her, they include the review of the existing scope of audit engagement in view of the fact that the inclusion of Section 63 of the ISA 2007 should be treated as part of the audit review (as required by law) and recommendation of a date for commencement of implementation as also prescribed by the ISA.


In an acceptance speech on behalf of members, the committee chairman, Mr. Jim Obazee, said that the members did not only consider the appointment to the committee as a call to duty, but a challenge to discharge a very important responsibility.According to him, this has a fundamental role to play in promoting business enterprise, foster socio-economic development, enhancing public-private partnership and the general well-being of the entire citizenry of Nigeria.


Obazee who is also the acting Director-General of the Nigerian Accounting Standards Board, commended SEC for adopting the approach of involving other agencies in fashioning out a roadmap for the implementation of this section of ISA.He said, ”I wish to submit that the roadmap approach SEC is adopting today may create an opportunity for our nation to rethink the regulatory regime across all dimensions, because securing the buy-in of the organisations and institutions that are affected by regulatory pronouncements and legislation usually allow relevant entities to respond to legislation with better understanding”.


Other regulatory bodies represented in the committee include the Central Bank of Nigeria; the Securities and Exchange Commission; the Nigerian Accounting Standards Board; the Corporate Affairs Commission; the National Insurance Commission, and the Nigerian stock Exchange.Also, the committee has representatives from the two professional accounting bodies namely, the Institute of Chartered Accountants of Nigeria, and the Association of National Accountants of Nigeria, as well as the industries, represented by GT Bank and Unilever Plc.





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