Some Nigerian banks exploit the country’s weak accounting system to boost their balance sheets, the Chairman, Securities and Exchange Commission, Dr. Suleyman Ndanusa, has said.
Ndanusa said this in a keynote address he delivered at the 2014 Annual Conference of the Association of National Accountants of Nigeria in Abuja on Tuesday.
Quoting a World Bank report commissioned by the Federal Government in 2010, Ndanusa said the state of accounting infrastructure in Nigeria was weak.
He said, “According to the report, a number of banks exploiting loopholes in Nigerian accounting and auditing standards, weak capacity of the regulatory bodies and weak enforcement, employed creative accounting to boost their balance sheets.
“These weaknesses in financial reporting, auditing and accounting contributed to Nigeria’s banking sector crisis. Given the magnitude of the costs of the crisis (between N1.5tn and N2tn), the government is focused on improving accounting and auditing.
“Since 2009, the Central Bank of Nigeria, SEC and other bodies have taken considerable steps to improve financial reporting and disclosure standards. One of such milestone steps is the enactment of the Financial Reporting Council of Nigeria Act No. 6 of 2011.”
The SEC chairman said in order to play its full potential in the nation’s economy, the accounting profession must address two challenges: seizing growth opportunities by meeting emerging business needs and fighting corruption.
President Goodluck Jonathan urged accountants to join the campaign to enlarge the revenue base of the country.
Jonathan, who was represented at the event by the Accountant-General of the Federation, Mr. Jonas Otunla, said the Federal Government had implemented several reforms aimed at sanitising the country’s financial accounting system.
He said, “It is noteworthy that the challenge of enhancing government revenue for better financing of annual budgets will no doubt deserve attention in a gathering of professionals such as this.
“Despite all criticism of contemporary governance, the government is still the most powerful institution of the society. No matter how large or influential, private corporations or associations may become, they ultimately must abide by the rules that are established and enforced by the government.
Punch
