NIGERIAN ACCOUNTING STANDARDS BOARD ACT 2003

Establishment of the Nigerian Accounting Standards Board

The Nigerian Accounting Standards Board Act, 2003 states as follows:
There is established a Board to be known as the Nigerian Accounting Standards
Board. The Board shall be:
(a) a body corporate with perpetual succession and a common seal; and
(b) may sue and be sued in its corporate name.
The Board may acquire, hold or dispose any property movable or immovable
for the purpose of carrying out its functions.

Membership of the Board

There is established for the Board, a Governing Council which shall have overall
control of the Board.
The Council shall consist of:
(a) a Chairman who shall be a professional accountant with considerable
professional experience in accounting practices;
(b) two representatives each of the following:
(i) Institute of Chartered Accountants of Nigeria; and
(ii) Association of National Accountants of Nigeria
(c) a representative each of the following:
(i) Federal Ministry of Commerce;
(ii) Federal Ministry of Finance;
(iii) Central Bank of Nigeria
(iv) Corporate Affairs Commission;
(v) Federal Inland Revenue Service;
(vi) Nigeria Deposit Insurance Corporation;
(vii) Securities and Exchange Commission;
(viii) Auditor-General for the Federation;
(ix) Accountant-General of the Federation;
(x) Chartered Institute of Taxation of Nigeria;
(xi) Nigerian Association of Chambers of Commerce, Industries, Mines
and Agriculture.
(d) the Executive Secretary of the Board
The Chairman and other members of the Council, other than ex-officio members,
shall be appointed by the President, on the recommendation of the Minister.
The Chairman and other members of the Council, other than ex-officio members
shall each hold office:
(a) for a term of 4 years in the first instance and may be reappointed for a
further term of 4 and no more; and
(b) on such terms and conditions as may be specified in their letters of
appointment.

Functions of the Board

The Board shall:
(a) develop and publish in the public interest accounting standards to be
observed in the preparation of financial statements;
(b) promote the general acceptance and adoption of such standards by
preparers and users of financial statements;
(c) promote and enforce compliance with the accounting standards
developed or reviewed by the Board;
(d) review from time-to-time the accounting standards developed in line
with the prevalent social, economic and political environment;
(e) receive from time to time notices of non-compliance with its standards
from the prepare, user or auditor of an account;
(f) receive copies of all qualified reports together with detailed explanations
for such qualifications from auditors of the accounts within a period of
60 days from the date of such qualification;
(g) advise the Minister on the making of regulations under Section 356 of
the Companies and Allied Matters Act, Cap. C 20, LFN 2004;
(h) advise the Federal Government on matters relating to accounting
standards; and
(i) perform such other duties which in the opinion of the Council, are
necessary or expedient to ensure the efficient performance of the
functions of the Board under the Act.

Powers of the Board

The Board shall have powers to:
(a) identify accounting statements which require standardisation and
establish the order of priority for addressing them;
(b) determine the scope and objectives of each standards;
(c) prescribe the methods and procedure for the productions of standards;
(d) prescribe the time table for the production of each standards;
(e) approve discussion papers, exposure drafts and standards;
(f) enforce and approve enforcement of compliance with accounting
standards in Nigeria; and
(g) exercise such powers as are necessary or expedient for giving effect to
the provisions of this Act.

Development of Statements of Accounting Standards

The Board shall observe the following procedure in the development of
statement of accounting standards:
(a) choice of a topic for standardisation;
(b) prepare and publish exposure draft;
(c) conduct a public hearing where necessary; and
(d) issue a statement of accounting standards.
Know the instruments establishing various organisations such as SEC, NDIC,
etc.

The Nigerian Accounting Standards Board (NASB)

Section 344 of Companies and Allied Matters Act, CAP C20, 2004 provides that
the directors of every company shall in respect of each year of the company;
prepare financial statements for the year to contain the necessary details as
provided in the Act.
Section 355 (1) CAMA states as follows:” The Financial statements of a company
prepared under section 344 of the Act, shall comply with the requirements of
schedule 2 to the Act with respect to their form and content, and with the
accounting standards laid down in the Statements of Accounting Standards
issued from time to time by the Nigerian Accounting Standards Board to be
constituted by the Minister after due consultation with such accounting bodies
as he may deem fit in the circumstances for this purpose provided that such
accounting standards do not conflict with the provisions of this Act”
Following the above provision, the Nigerian Accounting Standards Board (NASB)
was reconstituted with the following members:
(a) Central Bank of Nigeria (CBN);
(b) Federal Ministry of Finance;
(c) Nigerian Accounting Teachers Association;
(d) Nigeria Association of Chambers of Commerce, Industry, Mines and
Agriculture;
(e) Nigeria Stock Exchange;
(f) Securities and Exchange Commission;
(g) The Chartered Institute of Bankers of Nigeria;
(h) Federal Ministry of Commerce and Tourism;
(i) Federal Inland Revenue Service Board;
(j) Nigeria Deposit Insurance Corporation;
(k) The Office of the Auditor-General for the Federal;
(l) Corporate Affairs Commission;
(m) The Institute of Chartered Accountants of Nigeria;
(n) Chartered Institute of Taxation of Nigeria; and
(o) Association of National Accountants of Nigeria.
The Board from time to time issues Statements of Accounting Standards (SAS)
which seek to provide a guide for accounting policies and accounting methods
that should be followed by companies in the preparation of their financial
statements relative to income recognition, loss recognition, balance sheet
classification and many other provisions. The Board since inauguration has
issued twenty-one consecutive Statements of Accounting Standards (SAS) to
date.
The Nigerian Accounting Standards Board (NASB) is charged with the
responsibility for developing and publishing accounting standards to be
observed in the preparation of financial statements in Nigeria. The Companies
and Allied Matters Act makes it mandatory for auditors to ensure that financial
statements prepared in Nigeria comply with accounting standards issued by
the NASB.
The Nigerian Accounting Standards Board Act 2003 further seeks to promote
and enforce compliance with the accounting standards to be observed in the
preparation of financial statements. NASB Act 2003 prescribes stiff penalties
for non-compliance with accounting standards issued by the NASB. These
include:
(a) Fines at the discretion of the Board
(b) N5 million fine
(c) One year imprisonment, or both, on conviction
(d) Proscription or de-listing of the firm of accountants.

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