Nigeria’s Corporate Affairs Commission, an independent regulatory body, reportedly has warned microfinance banks (MFBs) in the country that they risk being shut down in 2013 if they do not adhere to the International Financial Reporting Standards (IFRS), a set of standards meant to harmonize accounting practices globally. IFRS are promoted by the UK-based IFRS Foundation.
Jim Obazee, executive secretary of Nigeria’s Financial Reporting Council (FRC), is reportedly concerned that many MFBs pretend not to understand IFRS, stating that “we need to stop these play-around organizations”. FRC is a federal government agency that oversees the country’s accounting practices. According to FRC, small and medium-sized enterprises in the country will have until 2014 to transition towards these standards. Details such as penalties faced by banks that fail to comply were not released.
By Lena Phillips, Research Associate
About International Financial Reporting Standards (IFRS) Foundation
IFRS Foundation, headquartered in the United Kingdom, is a nonprofit organization that works to develop and promote the use of internationally recognized accounting practices worldwide. The International Accounting Standards Board (ISAB), the standard-setting arm of the IFRS Foundation, is responsible for developing and publishing IFRS, including standards for small and medium-sized enterprises. Its meetings are open to the public and available for viewing via the internet. In developing its standards IASB works with stakeholders, investors, analysts, regulators, business leaders and accounting professionals.
Sources and Additional Resources:
Businessdayonline.com Article: “CAC to close down MFBs for non adoption of IFRC in 2013”, http://www.businessdayonline.com/NG/index.php/microfinance/49041-cac-to-close-down-mfbs-for-non-adoption-of-ifrc-in-2013
MicroCapital.org article, 14 April 2012: “MICROCAPITAL BRIEF: Mainstreet Microfinance Bank of Nigeria to Utilize Mechanics Fund, Adopt International Financial Reporting Standards”, http://www.microcapital.org/microcapital-brief-mainstreet-microfinance-bank-of-nigeria-to-utilize-mechanics-fund-adopt-international-financial-reporting-standards/#more-18318
MicroCapital.org article, 2 April 2012: “MICROCAPITAL BRIEF: Nigerian Microfinance Banks to Adopt International Financial Reporting Standard (IFRS) by March 2013”, http://www.microcapital.org/microcapital-brief-nigerian-microfinance-banks-to-adopt-international-financial-reporting-standard-ifrs-by-march-2013/#more-18108
MicroCapital Universe Profile: International Financial Reporting Standards (IFRS) Foundation, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Financial+Reporting+Standards+%28IFRS%29+Foundation
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