A - Statements of Accounting Standards are indigenous Nigerian Standards set after due consideration of the Nigerian laws, customs, business culture and the level of its economic development. Nigerians acquire their accounting education and training from different countries of the world.
A - The development of a Statement of Accounting Standard is time consuming, painstaking and requires the involvement of members of the Council and the public at large. First, a topic for standardisation may be chosen in response to certain suggestions of the business community, member organisations or members of the Council. Thereafter, a Steering Committee consisting of at least six experts drawn from the public, private and professional sectors of the economy is set up. It is the responsibility of the Secretariat to prepare a points outline paper for consideration by the Steering Committee. The points outline paper states in broad terms all the various aspects of the topic which the Committee wishes to cover. It is at this stage that a thorough examination is made of all local regulations, laws, current practices and standards promulgated in other countries. After the approval by the Council of the points outline paper, a preliminary Exposure Draft is produced by the Secretariat for consideration by the Steering Committee. It takes, on the average, about six Steering Committee meetings to produce a Draft that is recommended to the Council for consideration.
A - The Users of Financial Statements play three important roles in the development of Accounting Standards. Firstly, users are free to submit topics to be standardised to the Council. Secondly, at the exposure stage, comments received from users are carefully analysed and valuable ones incorporated into the text. Thirdly, users that have the relevant expertise are co-opted into the Steering Committees. Thus, right from the start, the participation of users is cherished and solicited.
A - Section 335(1) of the Companies and Allied Matters Decree 1990 requires all financial statements issued in Nigeria to comply with standards laid down in the Statements of Accounting Standards issued from time to time by the FRC. Independent auditors are responsible for ensuring that Accounting Standards are applied properly by management. Where there has been a material digression from the standards, the auditor is expected to qualify his report.
A - There is no direct relationship between FRC and the International Accounting Standards Committee (IASC). The FRC does not receive financial or technical assistance from the IASC. It, however, has available to it Standards set by the IASC as well as Standards of many other countries. All these Standards are carefully analysed and evaluated for their relevance in the course of developing its own Standards. It is important to note that the FRC subscribes to the need for harmonisation of Standards on a world-wide basis. Consequently, the FRC's Standards may not conflict with International Standards. However, the standards issued by the Financial Reporting Council sometimes reject alternative practices sanctioned by the International Accounting Standards.
A - Any conflict between a - Nigerian accounting standard (the Statement of Accounting Standard) and an International accounting standard should be resolved in favour of the Nigerian Standard. This is because the pronouncements of each national accounting standard-setting body determine accounting principles and practices to be used in its country. These Standards are developed with full regard to the existing laws, customs and other environmental conditions of the country.
A - Until recently, the Board had relied on donations from the business community and on subscriptions by member-organisations for its funding. However, with the formal inauguration of the Board in May 1992, it now receives subvention from the Federal Government.