Regulation of Financial Reporting and Corporate Governance in Nigeria - A Critical Review

Nigeria regulates her financial reporting just like other nations of the world. There exists various regulatory authorities and regulatory framework. Despite the existence of these bodies, the country still experience corporate failures in the banking and other sectors of the economy. In addition to these regulations, corporate governance principles and codes were issued in2003 for quoted companies and public companies with multiple ownership. Another was issued by the Central Bank Nigeria in 2004. All these were in response to the emerging issue of corporate governance triggered off by financial scandals in the western world, which resulted in loss of confidence in the stock market and corporate financial report. It is assumed that the corporate governance initiative and awareness would help to restore investors' confidence in corporate financial report and transformation of the stock market. A critical area on which investors, creditors, regulators, analysts and other stakeholders of companies have continued to focus attention is the aspect of financial reporting which has a lot to contribute toward effective corporate governance. Consequently the study reviewed the existing financial reporting regulations to ascertain their adequacy in complementing the reform initiatives to achieve good Corporate Governance in Companies in Nigeria and how they accord with International Accounting Standards. The Nigerian Statement of Accounting Standards were examined using International Financial Reporting Regulations and the other regulations were examined for uniformity in their provisions using some common financial accounting requirements for financial reporting purpose. The results indicate that there are some discrepancies in financial reporting requirements of the regulations. Moreover, the National Accounting Standards are not measuring up to the IFRS in terms of number of standards in issue and coverage. The regulatory bodies are to harmonize the existing regulations and put in more efforts in increasing the number of statement of Accounting Standards in issue