ACCOUNTING STANDARDS AND GUIDELINES

The following sections deal with accounting standards and guidelines issued
by the Institute of Chartered Accountants of Nigeria, International Accounting
Standards (IAS) and International Financial Reporting Standards (IFRS).

Accounting Standards and Guidelines

The practice of Accountancy worldwide is governed by sets of rules and
guidelines. These rules and guidelines are compiled into standards. There are
two sets of standards governing accounting practice in Nigeria. They are:
(a) International Standards:
(i) IAS: International Accounting Standards
(ii) SIC: Standing Interpretations Committee.
(b) Local Standards:
(i) SAS: Statement of Accounting Standards
(ii) AG: Auditing Guidelines
(a) International Accounting Standards (IAS)
Each standard discusses the Accounting treatment of a particular item
or group of items. A summary of the international standards are as
follows:
IAS 1 - Presentation of Financial Statement.
IAS 2 - Inventories.
IAS 3 - (Superseded by IAS 27 and IAS 28).
IAS 4 - (Superseded by IAS 16, IAS 22 and IAS 38).
IAS 5 - (Superseded by IAS 1).
IAS 6 - (Superseded by IAS 15).
IAS 7 - Cash flow Statements.
IAS 8 - Net profit or loss for the Period, Fundamental Errors and
changes in Accounting Policies.
IAS 9 - (Superseded by IAS 38).
IAS 10 - Events after the Balance Sheet date.
IAS 11 - Construction Contracts.
IAS 12 - Income Taxes.
IAS 13 - (Superseded by IAS 1).
IAS 14 - Segment Reporting.
IAS 15 - Information Reflecting the Effects of Changing Prices.
IAS 16 - Property, Plant and Equipment.
IAS 17 - Leases.
IAS 18 - Revenue.
IAS 19 - Employee Benefits.
IAS 20 - Accounting for Government Grants and Disclosure of
Government Assistance.
IAS 21 - The Effects of Changes on Foreign Exchange in Rates.
IAS 22 - Business Combinations.
IAS 23 - Borrowing Costs.
IAS 24 - Related Party Disclosures.
IAS 25 - (Superseded by IAS 39 and IAS 40).
IAS 26 - Accounting and Reporting by Retirement benefit Plans
IAS 27 - Consolidated Financial Statements and Accounting for
Investments in Subsidiaries.
IAS 28 - Accounting for Investments in Associates.
IAS 29 - Financial Reporting in Hyperinflationary Economics.
IAS 30 - Disclosures in the Financial Statements of Bank and
Similar Financial Institutions.
IAS 31 - Financial Reporting of Interests in Joint Ventures.
IAS 32 - Financial Instruments: Disclosure and Presentation
IAS 33 - Earnings Per Share.
IAS 34 - Interim Financial Reporting.
IAS 35 - Discontinuing Operations.
IAS 36 - Impairment of Assets.
IAS 37 - Provisions, Contingent Liabilities and Contingent Assets.
IAS 38 - Intangible Assets.
IAS 39 - Financial Instruments: Recognition and Measurement.
IAS 40 - Investment property.
IAS 41 - Agriculture (effective January 1, 2003).
(b) Standard Interpretations Committee (SIC)
These contain the interpretations of International Accounting Standards.
SIC 1 - Consistency - Different cost formulas for inventories (IAS 2).
SIC 2 - Consistency - Capitalisation of Borrowing Costs (IAS 23).
SIC 3 - Elimination of Unrealised Profits and Losses on Transactions
with Associates (IAS 28).
SIC 5 - Classification of Financial Instruments Contingent Settlement
Provisions (IAS32).
SIC 6 - Costs of Modifying Business Software (Framework).
SIC 7 - Introduction of the Euro (IAS 21).
SIC 8 - First-Time Application of IAS as the Primary Basis of
Accounting (IAS 1).
SIC 9 - Business Combinations - Classification either as Acquisitions
or Uniting of Interests (IAS 22).
SIC 10 - Government Assistance No specific Relation to Operating
Activities (IAS 20).
SIC 11 - Foreign Exchange - Capitalisation of Losses Resulting from
Severe Currency Devaluations (IAS 21).
SIC 12 - Consolidation - Special Purpose Entities (IAS 27).
SIC 13 - Jointly controlled Entities - Non-Monetary Contributions by
Ventures (IAS 31).
SIC 14 - Property, Plant and Equipment or Loss of Items (IAS 16)
SIC 15 - Operating leases - Incentives (IAS 17)
SIC 16 - Share Capital - Reacquired own Equity Instruments (Treasury
Shares) IAS 32.
SIC 17 - Equity - Costs of an Equity Transaction (IAS 32)
SIC 18 - Consistency - Alternative Methods (IAS 1)
SIC 19 - Reporting Currency - Measurement and Presentation of
Financial Statements under (IAS 21 and IAS 29).
SIC 20 - Equity Accounting Methods - Recognition of Losses (IAS 27)
SIC 21 - Income Taxes - Recovery of Revalue Combinations- Subsequent
Adjustment of fair Values and Goodwill Initially Reported (IAS
22).
SIC 22 - Business combinations- Subsequent adjustments of fair values
and goodwill initially reported (IAS 22).
SIC 23 - Property, Plant and Equipment - Major Inspection or overhaul
Costs (IAS 16).
SIC 24 - Earnings per share - financial Instruments and other contract
that may be settled in shares (IAS 33).
SIC 25 - Income Taxes - changes in the Tax status of an enterprise or
it’s shareholders (IAS 12).
Note: No SIC Interpretation was issued as SIC 4. Draft interpretation
SIC D4, Classification of Financial Instruments Issuer’s
settlement option, was withdrawn.
(c) Statement Of Accounting Standards
The publications of Nigerian Accounting Standards Board (NASB) are
as follows:
SAS 1 - Disclosure of Accounting Policies
SAS 2 - Information to be disclosed in Financial Statements
SAS 3 - Accounting for Property, Plant and Equipment
SAS 4 - Stocks
SAS 5 - Construction Contracts
SAS 6 - Extraordinary items and Prior Year Adjustments.
SAS 7 - Foreign Currency Conversions and Translations
SAS 8 - Accounting for Employees’ Retirement Benefits
SAS 9 - Accounting for Depreciation
SAS 10 - Accounting by Banks and Non-Bank Financial Institutions
(Part I).
SAS 11 - Leases
SAS 12 - Accounting for Deferred Taxes
SAS 13 - Accounting for Investments
SAS 14 - Accounting in the Petroleum Industry: Upstream Activities
SAS 15 - Accounting by Banks and Non-Bank Financial Institutions
(Part II).
SAS 16 - Accounting for Insurance Business
SAS 17 - Accounting in the Petroleum Industry: Downstream
Activities.
SAS 18 - Statement of Cash Flows
SAS 19 - Accounting for taxes
SAS 20 - Abridged Financial Statements
SAS 21 - Earnings per share
SAS 22 - On Research and Development Cost
SAS 23 - On Provisions, Contingent Liabilities and Contingent Assets
SAS 24 - Segment Reporting, Added: 2007-04-20
SAS 25 - Telecommunications Activities Added: 2008-02-11
SAS 26 - Business Combinations Added: 2008-02-11
SAS 27 - Consolidated and Separate Financial Statements Added:
2008-02-11
SAS 28 - Investments in Associates Added: 2008-02-11
SAS 29 - Interests in Joint Ventures Added: 2008-02-11
SAS 30 - Interim Financial Reporting Added: 2008-02-11
(d) Auditing Standards and Guidelines (AG)
These are the publications of Auditing Standards Committee (ASC) of
ICAN.
AG 1 - Auditing Guideline on Engagement Letters
AG 2 - Auditing Guideline: Prospectus and Reporting Accountant
(e) Adaptation of International Standards on Auditing (IS) as
Nigerian Standards On Auditing (NS)
The Institute of Chartered Accountants of Nigeria (ICAN) as a member
of the International Federation of Accountants (IFAC) is committed to
the Federation’s broad mission of the worldwide development and
enhancement of an accountancy profession with harmonized standards,
able to provide “services of consistent high quality in the public interest”.
As a condition of its membership, The Institute of Chartered Accountants
of Nigeria is obliged to support the work of IFAC by informing its
members of pronouncements developed by IFAC and by using its best
endeavours, to work towards implementation, when and to the extent
possible under local circumstances, of those pronouncements and
specifically to incorporate the principles on which they are based.
IFAC’s International Standards on Auditing (ISAs) in Nigerian auditing
pronouncements.
IFAC to date has issued over thirty International Standards on Auditing
(ISA) and one International Standard on Quality Control, some of which
are listed below:

Name Of Standard

ISQC1 Quality Control for Firms that Perform Audits and Reviews of
Historical Financial Information, and Other Assurance and
Related Services Engagements. The Nigerian equivalent is NSQC1
as adopted.
ISA 200 Objective and general principles governing an audit of financial
statements. The Nigerian equivalent is NSA 200 (Nigerian
Standards on Auditing) as adopted.
NSA 210 Terms of audit engagements.
NSA 220 Quality control for audits of historical financial (Revised)
information.
NSA 230 Documentation.
NSA 240 The auditor’s responsibility to consider fraud in an audit of
financial statements.
NSA 250 Consideration of laws and regulations in an audit of financial
statements.
NSA 260 Communication of audit matters with those charged with
governance.
NSA 300 Planning an audit of financial statements.
NSA 315 Understanding the entity and its environment and assessing the
risks of material misstatement.
NSA 320 Audit materiality.

Key

ISQC International Standards on Quality Control
ISA International Standards on Auditing

Members’ Education and Training

ICAN has a ‘Members’ Education and Training Unit’ which is responsible for
the training of members of the Institute and non-members through the under
listed training programmes.
(a) Mandatory Continuing Professional Education (MCPE) strictly for ICAN
members only;
(b) Executive Mandatory Continuing Profession Education (EMCPE) this is
for ICAN members in senior management positions in organisations;
(c) Continuing Professional Education (CPE) for ICAN members and nonmembers;
(d) In-house: this is organised by the Institute for ICAN members in
organisations who desire that the MCPE be held in their chosen location
(i.e. in-plant).
A member of the Institute is expected to earn minimum of thirty credit hours in
a year. A member earns fifteen credit hours at every seminar attended. The
four courses listed above are termed (“structured”). Other activities/events of
the Institute and courses attended by members outside the ones organised by
the Institute (unstructured) attract credit hours, but such courses must be
accredited by the Institute.

Sanctions for Non-Compliance:

Every member is expected to obtain a minimum of sixty credit hours within a
2-year cycle. A member in default would be suspended from membership at
the end of 2 years for six months in the first instance and thereafter expunged
from membership list if he/she fails to make up the deficiencies in credit hours.
Those Exempted:
(i) Members who are sixty years and above and who have indicated in
writing to the Institute their intention to retire from practising the
accountancy profession;
(ii) Members who are certified as medically unfit;
(iii) Traditional Rulers;
(iv) Members on special national or state engagements.

Programme for the Year

The Unit publishes an annual programme of its training courses.

International Financial Reporting Standards (IFRS)

The International Accounting Standards Committee (IASC) issued International
Accounting Standards (IAS) from 1973 to 2000. The International Accounting
Standards Board (IASB) replaced the IASC in 2001. Since 2001, the IASB
amended some international accounting standards and has proposed to amend
or replace some international accounting standards with new International
Financial Reporting Standards (IFRS). The IASB has adopted or proposed certain
new IFRSs on topics for which there were no previous international accounting
standards. Interpretations of Standards have also been issued on the standards.
To date, the following IFRS’s have been issued:
Preface to International Financial Reporting Standards May 2002
IFRS 1 First-time Adoption of International Financial Reporting Standards
June 2003
IFRS 2 Share-based Payment - February 2004
IFRS 3 Business Combinations - March 2004
IFRS 4 Insurance Contracts - March 2004
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations -
March 2004
IFRS 6 Exploration for and Evaluation of Mineral Assets - December 2004
IFRS 7 Financial Instruments: Disclosures
IFRS 8 Operating Segments

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