THE Financial Reporting Council of Nigeria (FRC) has suspended the December 31, 2018, audited financial statement of the Nigerian Maritime Administration and Safety Agency (NIMASA) for noncompliance with financial reporting standards and imposed a penalty of N500 million on the agency.
The FRC disclosed this in a statement made available to The ICIR on Friday, December 1.
It said the action was taken in line with the FRC Act 2011 (as amended) and the Financial Reporting Council of Nigeria-Guidelines/Regulations for Inspection and Monitoring of Reporting Entities.
“The FRC registration numbers of certifiers of NIMASA’s audited financial statement, Dr. Bashir Jamoh (FRC/2017/CIANG/00000016699) and Chudi Offodile (unregistered) are hereby suspended. This suspension renders them incapable of certifying any financial statements in Nigeria.
“The Council hereby imposes a Type 6 penalty of N500,000,000 (Five Hundred Million Naira) for the withdrawal of the 2018 financial statement, in line with Regulation 18 of the FRC Guidelines/Regulations 2014,” FRC stated.
The Council stressed that NIMASA’s 2018 audited financial statements were withdrawn and that the agency was directed to restate its 2018 audited financial statements.
It instructed NIMASA to publish within seven working days of the notice dated November 30 in at least two national newspapers (full page) that its (NIMASA) 2018 financial statements and returns had been withdrawn for noncompliance with financial reporting standards.
The reporting council also directed NIMASA to begin restating its 2018 audited financial statement as enshrined in FRC’s Act.
It said, “This restatement will form the basis for the preparation and submission of audited financial statements for the years ended December 31, 2019, 2020, 2021, and 2022.
“NIMASA is required to file the restated financial statements for 2018, together with the management letters issued by their external auditors, with the Council within 60 days.”
This action against NIMASA serves as a reminder to all reporting entities of their responsibility to comply with prescribed standards and regulations, FRC added.
On July 5, The ICIR reported that the noncompliance of public interest entities to the financial reporting standards raised concerns about the integrity of their financial management, as financial reports are the core of transparency and accountability surrounding their activities.
It also raised concerns about the FRC mandate in holding on to its core values of integrity, accountability, transparency, and fairness, bringing utmost confidence to investors, reputation to oversight, and ensuring quality in accounting, auditing, actuarial, valuation, and corporate governance standards and non-financial reporting issues.
What FRC’s Act 2011 (Act No. 6) says
Under Section 77, Public interest entities mean governments, government organisations, quoted and unquoted companies, and all other organisations which are required by law to file returns with regulatory authorities, and this excludes private companies that routinely file returns only with the Corporate Affairs Commission (CAC) and the Federal Inland Revenue Service (FIRS).
Where the Council reaches a final decision under section 57 to the effect that a public interest entity has failed to comply with any of its decisions under this Act, and with such other financial reporting, accounting, auditing, and financial reporting standards as may be specified under the relevant enactments, the Council shall serve a notice on the entity for an immediate restatement of its financial statements.