6 December 2009

Nigeria: Senate and Politics of Accounting Bodies

Abuja — There is a growing disquiet within the Accounting profession in Nigeria over the delay in the passage of the Bill on the Institute of Chartered Public Accountants (CPA) and the Chartered Institute of Management and Cost Accountants (CICMA) by the Senate after these Bills scaled through the House of Representatives early this year. These two Bills are not new to the National Assembly as they were passed by both chambers during the last legislative regime. Unfortunately, they were among the over 50

Bills that were not signed into law by former President Olusegun Obasanjo before the expiration of his tenure.

When President Umaru Yar'Adua came into office he recognized that these Bills are meant for the purpose of enhancing and increasing efficiency in the profession but had to follow due process by sending them to the National Assembly for the new law makers to pass them. Mr. President also recognized that the Bills are in tandem with the Professional Bodies (Special Provision) Act 1972 and freedom of association as enshrined in the 1999 constitution.

The House of Representatives made the first, second and third readings of the Bills last year and eventually passed them early this year and transmitted them to the Senate for concurrence.

On the CICMA Bill, the Senate did the first and second reading and referred it to the Committee on Establishment and Public Service under the chairmanship of Senator Mohammed Ahmed. The committee had public hearing on the Bill and even had interactive sessions with stakeholders in the Accounting Profession including the Institute of Chartered Accountants of Nigeria (ICAN), Association of National Accountants of Nigeria (ANAN), Office of the Accountant General of the Federation (OAGF), Office of the Auditor General of the Federation, Federal Ministry of Finance, Chartered Institute of Taxation and the Institute of Certified Public Accountants of Nigeria. A letter from the federal Ministry of Education which gave the Institute a clean bill of health was equally tendered before the committee.

Apart from ICAN, all the other stakeholders were in support of the passage of the bill in order to encourage excellence and professionalism in the Accounting field in Nigeria. ICAN opposed the Bill on the ground that multiple institutes in the Accounting profession may lead to proliferation. It is instructive that ICAN never questioned the professional competence of members of the Institutes seeking parliamentary recognition, their ability to train world class Accounting professionals, their examination syllabus, list of external Moderators, nominal roll of academic and support staff or comparability with other professional bodies (local or foreign).

The Senate committee, however, held that ICAN's objections had no correlation to the CICMA Bill and also that the amendments suggested by ICAN on the bill had no relevance. The committee then unanimously recommended to the Senate to pass the Bill moreso since the two chambers had already passed the same bill in 2005.

At this point, the politics of monopoly came into play as forces opposed to the deregulation of professional bodies went into high wire lobby to kill any Bill that will open up the space in the Accounting profession.

There were reports that some of them visited some Senators the night preceding the day Senator Ahmed presented the report of his committee to the full house. When the committee eventually presented the report, the Senators went into clause by clause consideration of the Bill and this was when the Bill was killed on the ground that the passage of the bill will lead to proliferation as argued by ICAN. Of course, ICAN officials in the gallery forgot themselves and started jubilating and singing victory songs.

However, further investigation has put a lie on the argument that Nigeria already has many Accounting professional bodies compared to other nations. Presently ICAN and ANAN are the only ones backed by Acts of parliament. All over the world, the most recognized and prestigious Accounting body is the Institute of Certified Public Accountants but in Nigeria the Bill to establish that body is still pending in the Senate for no tenable reason.

Proliferation is certainly not an excuse and the Senate has unwittingly allowed itself to be dragged into the politics of monopoly which ICAN is spearheading. It took a lot of political will for the government to pass the ANAN Act. ICAN did everything they could to frustrate the legitimate aspiration of ANAN members. But today, Nigeria is reaping from the good work of ANAN through the high level manpower they are bringing out from their training school in Jos, Plateau state.

If the truth must be told, the only concern and fear of ICAN is the possible loss of revenue and stiff competition if more professional bodies are recognized in the country. In almost all the proven cases of corruption in the country Accountants play one role or the other but ICAN has never come out one day to reprimand or sanction their members for either outright collaboration with the looters of our treasury or for gross negligence. Yet Accountants are supposed to be custodians of public trust.

Indeed, ICAN has failed this country because of its inability to enforce code of conduct on its members. A lot of companies and banks like the defunct National Bank of Nigeria have folded up or are gradually going under in this country as a result of the mismanagement of the resources of the corporate organizations by the management. Yet their company annual accounts are audited and signed by supposedly high profile chartered ICAN members! It has now become fashionable for blue chip companies in the country to import Auditors from abroad every year to audit their account because they have lost faith in the ability of their counterparts within the country to give them accurate and reliable reports. Some of them were even reported to have actively engaged in cooking up Annual Accounts for unregistered companies as revealed during the Hon.Ndudi Elumelu power probe in the House of Representatives.

Another of their top shots was a governor in this country in the recent past and ICAN has not queried him over his handling of the funds of the state that led to his impeachment. Ethics and Code of Conduct appear to have no place in the ICAN dictionary.

Despite being on the scene for several decades ICAN has not deemed it fit to establish a school like ANAN where Accounting students can be trained and retrained as obtainable in other countries. Anybody, including a road side cobbler without any formal education can become an ICAN chartered Accountant so long as he can memorize their syllabus and dump it on paper during ICAN membership examinations.

Instead of dissipating energy blocking other accounting bodies from operating, ICAN should take a cue from ANAN and set up a post graduate school where intending accounting students can be groomed as practised in other professions like Journalism, Law and Medicine. Their concern should go beyond trivialities and parochial pursuits.

In other professions in the country like Engineering, Media and Medicine, several bodies abound and nobody is shouting proliferation. These bodies give room for specialization and their members are allowed to belong to the body registered for people that share same specialization. But ICAN will not allow that in the Accounting profession.

Maybe the Senators and ICAN need to be informed that some countries like the United Kingdom, United States and Canada have several Accounting bodies and more will be registered when the need arises. For instance, in the United Kingdom they have the Chartered Institute of Management Accountants; the Institute of Chartered Accountants in England and Wales; the Chartered Institute of Public Finance and Accountancy; the Association of Chartered Certified Accountants; Institute of Chartered Accountants of

Scotland and Association of Accounting Technicians.

In the United States some of the registered Accounting bodies include Institute of Management Accountants; American Institute of Certified Public Accountants

National Association of State Boards of Accountants; Information Systems Audit & Control Association and the Institute of Internal Auditors. Even Australia with its small population has at least three independent Accounting bodies namely CPA Australia; the Institute of Chartered Accountants in Australia and National Institute of Accountants in Australia.

Pakistan has Institute of Cost and Management Accountants of Pakistan; the Institute of Chartered Accountants of Pakistan and Pakistan Institute of Public Finance Accountants. The situation in other countries where professional bodies have long been deregulated is not radically different from the countries above but in Nigeria ICAN, still suffering from hangover of anachronistic monopoly era is shouting proliferation in this millennium.

The Senate further needs to be reminded that in the history of the National Assembly there is no bill from either of the two chambers transmitted to the other chamber for concurrence that has been killed apart from the CICMA bill. This might be a bad precedent unless it is redressed. Fortunately, the Senate Standing Rules has a provision in Section 54 that made it possible for the bill to be resurrected and passed. The bill will, of course go back to the appropriate committee for due process before it is resubmitted to the senate. While that is going on there is now no reason why the Bill on the Institute of

Certified Public Accountants cannot go for the second reading in the Senate.

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