It gives me great pleasure to be here today to give opening remarks on this very important training on International Financial Reporting Standards being organized for the staff of the Corporation. The training is important because conversion from Local GAAP to IFRS is a journey that every country has to undertake and Nigeria is no exception. Indeed Nigeria, like several other countries has demonstrated great commitment to the conversion to IFRS through the approval by the Federal Executive Council of a conversion roadmap as well as putting all the necessary structures that would facilitate the transition process.
Let me say at this juncture that publicly listed entities and significant public interest entities have been given a date of 1st January, 2012 to implement IFRS as per the national roadmap. The banks as publicly listed entities, which the NDIC supervises and the Corporation itself as a significant public interest entity have to make all efforts to achieve the deadline set for the conversion to IFRS in the country. It is therefore very clear that the Corporation is affected by the conversion in two respects, one as a reporting entity and second as a supervisor of banks. As a supervisor, the Corporation has the responsibility of ensuring that all the publicly listed entities under its purview convert to IFRS without disruption to their operational activities. It also has to ensure that the Corporation’s examiners that inspect the banks’ books are equipped with adequate skills to be able to scrutinize their IFRS complaint status.
Ladies and gentlemen, a critical aspect of the conversion process and one which seems to be a major challenge is capacity building. We must admit that IFRS is novel in the country therefore, capacity building is a necessity. Happily, the various agencies involved in the IFRS conversion process appreciate the need for this urgent task and are making efforts in that direction. The Corporation being a key player in the process has to show high commitment to capacity building by way of continually developing the skills of our staff in order to prepare them for the changes and developments in financial reporting regimes that are global best practices. On the part of the banks that we supervise, we are aware through reports we received from them that they are working hard and many of them have demonstrated high commitment to capacity building on IFRS. As their regulators, we certainly have to show higher commitment in embracing the new concept for the process to succeed. Today’s training programme and others, which the Corporation embarked on such as the IFRS trainings sponsored by the Office of Technical assistance (OTA) of the United States Department of Treasury are therefore a demonstration of that commitment.
Ladies and gentlemen, as we will be told in the course of the programme, International Financial Reporting Standards are principle-based set of standards that establish broad-based rules as well as dictate specific treatments of accounting items as reported on financial statements. It comprises of IFRS, IAS and interpretations that originated from the International Financial Reporting Interpretations Committee. The benefits to be derived through the adoption of IFRS are enormous. Aside from enhanced transparency in terms of adequate disclosures and ease of comparability between financial reports of companies in different jurisdictions, companies that adopt IFRS would be seen to be adopting a “global financial reporting” basis that will enable them to be understood in a global market place. Such companies could access world capital markets as well as promote their new businesses. Also, a consistent financial reporting through the adoption of IFRS would allow a company to apply common accounting standards with its subsidiaries worldwide, which has the benefit of improved internal communications, quality of reporting as well as group decision-making and could be perceived as an international player.
Finally, to the participants, you must understand that a lot of resources have been committed towards giving you the best. The consulting firms chosen to handle the training sessions in Abuja and Lagos, namely Muntari Dangana & Co. and KPMG Professional Services are Chartered Accounting Firms of international repute, with track records, which includes IFRS training in the country. I therefore urge you to take the training seriously so as to get the maximum benefit and give the Corporation value for its investment.
I wish you fruitful deliberations.
Umaru Ibrahim mni
Nigeria Deposit Insurance Corporation
November 16, 2011