What is so special about the Financial Reporting Council of Nigeria? This regulatory body is formerly known as the Nigerian Accounting Standards Board. This organization sets the accounting standards in the country. What has improved since this organization changed its name? What are the Functions of Financial Reporting Council of Nigeria? Continue reading to find out!
Financial Reporting Council of Nigeria Act
No regulatory body in the country can serve Nigeria without a proper legal document. The Financial Reporting Council of Nigeria also has this type of document. The name of the document is Financial Reporting Council of Nigeria Act 2011. According to this document, the Nigerian Accounting Standards Board Act 2003 was repealed. Therefore, the duties, responsibilities, and functions of the NASB are inherited by the FRCN.
What are the Functions of Financial Reporting Council of Nigeria?
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According to the FRCN Act 2011, this regulatory body has the following 19 functions:
1) The FRCN has a function to develop accounting and financial reporting standards. These standards are to be observed by public entities to publish their financial reports and statements;
2) The FRCN reviews, promotes and enforces the standards of the accounting and financial reports to all organizations in Nigeria;
3) The FRCN can also receive notes from third parties about non-compliance of the current standards of the accounting and financial reports;
4) The FRCN receives copies of annual financial reports of public entities. The FRCN has the obligation to approve/disapprove these documents within 60 days;
5) The FRCN provides pieces of advice to the Federal Government regarding financial and accounting reports and their standards;
6) The FRCN maintains the registration of the professionals in the accounting sphere related to the process of creation of the financial reports;
7) The FRCN monitors the corporate governance financial papers so that they can comply with the FRCN recommendations;
8) The FRCN promotes the standards of accounting issued by the International Accounting Standards Board and the International Federation of Accountants. The FRCN also provides adaptation of these international standards in Nigeria;
9) The FRCN also promotes various training, studies, researches and other educational actions regarding the financial reports of the country or just one public organization;
10) The FRCN reviews and monitors the professionals in the accounting sphere;
11) The FRCN reviews and monitors the financial reports and statements of the public organization;
12) The FRCN monitors and enforces the obedience of the financial professionals and public entities to the FRCN Act 2011 and FRCN recommendations;
13) The FRCN can provide systems or schemes to engage any financial activity with any local or international organization to discharge its functions;
14) The FRCN receives financial reports from qualified organizations regarding detailed information of any relevant financial matters. This information is to be announced to the public in a 30-day period;
15) The FRCN adopts the international standards of financial reporting. It also keeps these standards up to date according to the international financial standards;
16) The FRCN specifies the standards of the finance and accounting in the country. It also issues the minimum level of these standards;
17) The FRCN develops the country with financial reporting standards and monitors to make sure that they comply with the International Auditing and Assurance Standards Board;
18) The FRCN has the ability to perform other relevant functions according to the recommendations of the international organizations;
19) The FRCN issues guidelines for public organisations to follow.
Composition of Financial Reporting Council of Nigeria
According to the FRCN Act 2011, the FRCN Board consists of:
– Association of National Accountants of Nigeria (two representatives);
– Chairman (a professional with the significant experience in the accounting sphere). For today it`s Adedotun Sulaiman;
– Institute of Chartered Accountants of Nigeria (two representatives);
The Board also has representatives from the following offices (one representative each):
A short History of the FRCN
The former body of the FRCN was created in 1982 and it was called Nigerian Accounting Standards Board or just NASB. This regulatory body provided all necessary regulations according to the standards of accounting sphere. The primary functions of this body were provided in the NASB Act 2003.
According to the reports of the International Monetary Fund in 2010, the NASB was not able to maintain its functions. This then led to reforms in the regulatory body. Eventually, the NASB was replaced by the FRCN. In 2011, a decision was made to repeal the NASB and substitute it with the FRCN.
Duties of Financial Reporting Council of Nigeria
The duties of the FRCN come from its functions. Therefore, the main duty is to create, perform, implement and monitor the financial and accounting reports of public entities.
These financial reports should be stated according to the laws of Nigeria and recommendations of international organizations.
That`s all the necessary information you need to know about the Financial Reporting Council of Nigeria!