Tax bites June 2014

The development and issuance of accounting standards in Nigeria was the principal role of the NASB. The FRCN has however been given a much larger role to play in the FRCN Act. The functions of the FRCN are specified in section 8 of the Act and its functions include development of accounting and financial reporting standards, enforcement of accounting standards, advising the federal government on accounting and financial reporting standards, maintaining a register of professional accountants and other professionals engaged in the financial reporting process, monitoring compliance with the code of corporate governance, promotion of compliance Act is clear and unequivocal on this issue as the phrase is mentioned anytime a direct reference is made to the exercise of powers specified therein.

The International Federation of Accountants (IFAC) defines public interest entities as listed entities and entities defined by regulation or legislation as public interest entities; or for which the audit is required by regulation or legislation to be conducted in compliance with the same independence requirements that apply to audit of listed entities. Various jurisdictions use different thresholds for defining public interest entities and we have chosen to define it by legislation in Nigeria.

In the FRCN Act public interest entity means governments, government organisations, quoted and unquoted companies and all other organisations which are required by law to file returns with regulatory authorities excluding private companies that routinely file returns only with the CAC and Federal Inland Revenue Service (FIRS).