Mr. Chidi Onyeukwu Ajaegbu, was recently elected the 50th President of the Institute of Chartered Accountants of Nigeria (ICAN). In an interview with journalists, he articulated his agenda for the accountancy profession and the Institute. He also commented on recent developments in the nation’s economy. Excerpts:
What is your vision for the institute?
The thrust of my presidency is protecting public interest and enhancing professionalism.
Public interest is basically about advocacy and advocacy is basically about public interest and making aggressive input into policy making processes of the government and also challenging them if necessary and making independent opinion. So, essentially that is what is going to drive this year.
When you say protecting public interest, what do you really mean?
Let me just say that our institute, because of our conservatism over the years, we have been running away from getting involved in conversations in the society.
So, what we want to do in the next one year is to come up with well researched positions on topical national issues and come out to talk about them, send representatives to government and if we need to use the media to achieve that, we may do so.
For example, all through the issue of the missing money at the Nigerian National Petroleum Corporation (NNPC), we were not involved in the debate. I think the institute, as a protector of public interest, ought to have gotten involved in the discussion and probably set a template, process to ascertain what the position is. We intend to do more of that this year.
In recent times, there have been reported cases of chartered accountants allegedly being involved in fraud and it seems like ICAN does not do anything about that?
Let me say that there is this misconception that we are not doing anything. We have disciplinary processes.
You need to report a Chartered Accountant of having committed some form of infraction before we can set up what we call an investigative panel. If for example the accountant in your office commits fraud and you report him or her to the institute; the register will direct the investigative panel to investigate the allegations.
When the allegations are investigated and there is a report and the committee finds that person ‘culpable,’ the next level is to take that investigation and the accountant to the tribunal.
The tribunal is an equivalent of a high court meaning that whatever decision we take at the tribunal level can only be challenged at the court of appeal.
But is it a deliberate attempt not to allow members of the public know the outcome of the disciplinary panel?
The point is that we don’t publicise in the sense that we don’t go to the print media. If you go to our websites, journals, financial statements, they are all there. You will get the names, what they were tried for, what happened and the outcome of the cases.
They are all there. But what we don’t do is to go to the media and advertise it. There have been a lot of discussions and arguments around that, but we haven’t come to the conclusion that, that is the best way.
At one point, during one of the past presidents, our proceedings were being televised. But we did a policy impact assessment and the feedback we got didn’t add much to the brand and we needed to rethink it and to find other ways of doing it. But don’t forget, as I said at the beginning that we are very conservative.
We have an enabling Act and what it says is that there must be a petition. In fact, what it says is that the petition must be under oath to serve as a deterrent for people lying. So, if your petition is under oath, you can’t come up with allegations that are not true.
A lot of professional bodies, including ICAN, seem not to be comfortable with the Financial Reporting Council (FRC). What is the view of ICAN on the status of the FRC?
First of all, that is the law. You see, when they are about to make a law and there are public hearings and so on, you don’t fold your arms and the law is made and when it is now being implemented you start complaining.
I think that is very typical of our people. If you had any misgivings about the law, the point you should have challenged it should have been during the public hearing. Now, the law has come to stay. What we can now do is to go into discussions with the FRC and then those complaining should come up with the specific areas they want us to deal with. But our law is our law, whether they are bad or good.
So, for it to become something else might be as a result of implementation or some part of the law that you want to be amended. But it is about dialogue because it is our law. When you say members are complaining, of course we have about 39,000 members and some people might have some misgivings. On paper the way it looked, it was a good bill and we can get into dialogue about the implementation of the Act.
How are your members taking the aspect of the FRC Act that states that ICAN should no longer grant licence to individual members?
At ICAN, we have changed the way we sign our financial statements and that was as a result of the direct ruling of the FRC. There was a court ruling which actually was in tandem with what is obtainable in a sane environment and aligns with the FRC law. So you now sign your name with your membership number, put your firm’s name and your FRCN number. It is all about trying to let people understand the seriousness of that signature because what it is talking about is to make the individual liable. For you to put your name and signature on a financial statement, it means you are taking responsibility for that financial statement as the engagement partner.
Has ICAN given up on the fight against the multiplicity of accounting bodies in the country?
Taking you back, I will want you to understand that it has been established beyond reasonable doubt that the ANAN bill was signed by the military government and we have been in court, from the court of first instance to the Supreme Court. But as time went by, there have been some form of relationship between both organisations that we had to lend support to ANAN for associate membership of some associations. The Supreme Court has not ruled, but our relationship has become more cordial. Essentially, the ANAN law is our law and it is here to stay.
What is your take on the recently rebased GDP of the country?
I think the key indicator of every economy is the human development index and that has to do with full employment. Full employment is driven by growth, inclusive growth and not non-inclusive growth. What we have here is non-inclusive growth. For us to have an inclusive growth, we have to basically look at our structures. We have a distorted structure such that the policy impacts are not felt. So when people come around and talk about policies, I don’t think the problem with the country is the policy, I think it is the structure on which those policies are hanging on. The rebasing of the economy itself does not drive economic development. What it is just telling you is that you have higher capacity that you didn’t know before. South Africa congratulated us, but if you look at the key indicators, South Africa is still ahead of us, but they sent a congratulatory message and wished us well.
Why is it that a lot of insurance companies are finding it difficult to migrate to the International Financial Reporting Standards and it appears as if the accountants are also not finding it easy to support them?
Let me put it this way, the IFRS requires a lot of details and it takes a lot of time. So, I wouldn’t know specifically why they are having problem with the insurance sector, but I do know that a lot of details and provisioning are required to migrate.