Nigeria

The main legislation that establishes corporate financial reporting requirements in Nigeria is the Companies and Allied Matters Act 2020 (CAMA 2020). CAMA outlines the formation, operation, and dissolution of companies, as well as requirements for corporate accounting, auditing, and financial reporting.

Accounting Framework

All companies are required to prepare annual financial statements in accordance with standards issued by the Financial Reporting Council of Nigeria (FRC), established under the Financial Reporting Council of Nigeria Act 2011 (as amended). The FRC is responsible for setting both private and public sector accounting standards and ensuring compliance with financial reporting requirements, among other functions. Under the FRC Act, accounting standards adopted by the FRC are required to be aligned with standards issued by the International Accounting Standards Board.

Public interest entities are required to apply International Financial Reporting Standards (IFRS) in the preparation of their financial statements. Small and medium-sized entities are required to apply IFRS for SMEs. Nigeria applies a differential reporting framework, whereby entities are categorized based on public interest status and size criteria established by regulation. Sector regulators such as the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Exchange Group, and the National Insurance Commission may impose additional financial reporting requirements for entities under their supervision.

Auditing Framework

CAMA 2020 establishes a mandatory statutory audit requirement for companies in Nigeria, subject to applicable exemptions under the law. In accordance with the Financial Reporting Council of Nigeria Act, the FRC has authority to develop or adopt and maintain auditing standards in Nigeria and to ensure consistency with standards issued by the International Auditing and Assurance Standards Board.

Appointment of auditors of regulated entities is subject to approval by the respective sector regulators, to whom audited financial statements must be submitted periodically.

Professional accountants in Nigeria are regulated at the statutory level by the Financial Reporting Council of Nigeria (FRC) and, at the professional level, by two professional accountancy organizations operating in the jurisdiction: the Institute of Chartered Accountants of Nigeria (ICAN) and the Association of National Accountants of Nigeria (ANAN).

In accordance with the Financial Reporting Council of Nigeria Act 2011 (as amended), the FRC has regulatory and oversight authority over financial reporting and audit matters in Nigeria. The FRC is responsible for registration of professional accountants and audit firms involved in the financial reporting of public interest entities (PIEs), conducting quality assurance inspections for audits of PIEs, and enforcing sanctions for non-compliance with applicable standards and professional misconduct. The FRC is also responsible for adopting accounting standards aligned with IFRS and for developing or adopting and maintaining auditing standards consistent with pronouncements issued by the International Auditing and Assurance Standards Board. In addition, the FRC is authorized to issue ethical requirements applicable to auditors and other professionals providing services to PIEs.

The FRC Act requires professional accountants to be registered with the FRC in order to prepare financial statements and conduct statutory audits of PIEs. A practicing certificate issued by ICAN or ANAN is required as part of the registration process for individuals delivering services in public practice.

ICAN and ANAN operate under their respective enabling Acts and offer distinct professional qualifications. ANAN offers the Certified National Accountant (CNA) designation. Candidates are required to hold a university degree or Higher National Diploma in accountancy, complete a professional education program at the Nigerian College of Accountancy, pass the professional examinations, and fulfill practical experience requirements through an Accountant-in-Training program before being eligible for membership and issuance of a practicing certificate.

ICAN offers the Chartered Accountant (CA) and Associate Accounting Technician (AAT) designations, which are protected titles under the ICAN Act. Qualification requires completion of a professional accountancy education program, successful completion of qualifying examinations, and fulfillment of practical experience requirements. Chartered Accountants may practice as auditors upon issuance of a practicing license by ICAN and, where applicable, registration with the FRC for audits of PIEs.

Through their respective founding legislation, both ICAN and ANAN have authority to establish initial and continuing professional development requirements, determine examination and certification requirements, maintain membership registers, enforce professional conduct and ethical requirements for their members, and conduct quality assurance reviews for members within the scope of their mandates.

The Financial Reporting Council of Nigeria (FRC) serves as the audit oversight authority in Nigeria, established under the Financial Reporting Council of Nigeria Act 2011 (as amended).

In accordance with the Act, the FRC has regulatory and oversight authority over auditors of public interest entities. Its responsibilities include registration of auditors and audit firms involved in the financial reporting of public interest entities, conducting quality assurance inspections for audits of public interest entities, and enforcing sanctions for non-compliance with applicable standards and professional misconduct. The FRC is also responsible for adopting accounting standards aligned with IFRS, developing or adopting and maintaining auditing standards consistent with pronouncements issued by the International Auditing and Assurance Standards Board, and issuing ethical requirements applicable to auditors of public interest entities.

The FRC is not a member of the International Forum of Independent Audit Regulators.

In addition to FRC oversight, auditors must be members of either the Institute of Chartered Accountants of Nigeria or the Association of National Accountants of Nigeria and are subject to the respective regulatory frameworks of those organizations. Through their enabling legislation, both professional accountancy organizations establish professional education and continuing development requirements, maintain membership registers, enforce professional conduct and ethical standards for their members, and conduct quality assurance reviews within the scope of their mandates.

Association of National Accountants of Nigeria (ANAN)

The ANAN Act 1993 establishes the Association of National Accountants of Nigeria. ANAN administers the Certified National Accountant (CNA) qualification, which is conferred upon individuals who successfully complete the prescribed professional education program and qualification examinations. CNAs are required to be members of ANAN in order to use the designation. Many ANAN members are employed in the public sector.

Under its enabling legislation, ANAN is responsible for establishing initial and continuing professional development requirements for its members, determining examination and certification requirements, maintaining a membership register, enforcing professional conduct as well as ethical and technical standards applicable to its members, and conducting quality assurance reviews within the scope of its mandate.

ANAN collaborates with the Financial Reporting Council of Nigeria (FRC) on audit and professional standards matters. The association is a member of the International Federation of Accountants (IFAC), the Pan African Federation of Accountants (PAFA), and the Association of Accountancy Bodies in West Africa (ABWA).

Institute of Chartered Accountants of Nigeria (ICAN)

The Institute of Chartered Accountants of Nigeria was established under the ICAN Act 1965. Its membership comprises accountants, auditors, and accounting technicians. Upon fulfillment of prescribed education, examination, and practical experience requirements, members are awarded the titles of Chartered Accountant (CA) or Associate Accounting Technician (AAT), which are protected under the ICAN Act.

ICAN’s statutory responsibilities include establishing initial and continuing professional development requirements for its members, determining examination and certification requirements, maintaining a membership register, enforcing professional conduct as well as ethical and technical standards, and conducting quality assurance reviews within the scope of its mandate.

ICAN is a founding member of ABWA and is also a member of IFAC and PAFA.

The Financial Reporting Council of Nigeria (FRC) is legally responsible for establishing and implementing a quality assurance review system in Nigeria in accordance with the Financial Reporting Council of Nigeria Act 2011. The FRC has issued guidelines for inspection and monitoring of reporting entities and has initiated regulatory reforms to strengthen audit oversight. However, the FRC’s inspection regime for audits of public interest entities has not been fully operationalized.

In parallel, the Association of National Accountants of Nigeria (ANAN) and the Institute of Chartered Accountants of Nigeria (ICAN) have established quality assurance review systems for their respective members in accordance with their enabling legislation. Both professional accountancy organizations conduct quality assurance reviews of member firms performing audits of public and non-public interest entities. ANAN reports that it has operated a QA review system since 2011 and has conducted a self-assessment of its system against SMO 1 requirements. ICAN has operated a QA review system since 2009 and similarly reports alignment of its system with SMO 1 requirements.

While quality assurance systems exist at the professional body level and incorporate elements of SMO 1, the statutory regulator’s inspection system for audits of public interest entities is not yet fully operational. Accordingly, the quality assurance framework in Nigeria is considered Partially Adopted and does not yet fully align with SMO 1 requirements at the jurisdiction level.

Current Status: Partially Adopted

Initial and continuing professional development of professional accountants in Nigeria are determined by the Institute of Chartered Accountants of Nigeria (ICAN) and the Association of National Accountants of Nigeria (ANAN), in coordination with the National Universities Commission and the National Board for Technical Education, which oversee tertiary education curricula. The professional accountancy organizations accredit universities and training programs to ensure alignment with professional qualification requirements.

Under the ANAN Act 1993, ANAN establishes and oversees education, examination, practical experience, and continuing professional development requirements for candidates pursuing the Certified National Accountant designation. ANAN reports that its education and training framework incorporates the requirements of IES 1 through IES 7 and that IES 8 is applied as appropriate to professional accountants performing audits of financial statements.

Under the ICAN Act 1965, ICAN establishes initial and continuing professional development requirements for its members. ICAN has implemented a revised syllabus incorporating a learning outcomes approach to professional education and practical experience requirements consistent with the structure of the International Education Standards. However, ICAN requires members to complete 90 continuing professional development credits over a three-year period, which does not fully meet the input-based requirement of 120 hours over three years set out in IES 7.

While both professional accountancy organizations have incorporated key elements of the International Education Standards into their qualification and continuing professional development frameworks, continuing professional development requirements do not fully meet the requirements of IES 7 in effect at the time of assessment. Accordingly, International Education Standards are considered Partially Adopted in Nigeria.

Current Status: Partially Adopted

The Companies and Allied Matters Act 2020 establishes a mandatory statutory audit requirement for entities in Nigeria, subject to applicable exemptions under the law. In accordance with the Financial Reporting Council of Nigeria Act 2011 (as amended), the Financial Reporting Council of Nigeria (FRC) is responsible for developing or adopting and maintaining auditing standards in Nigeria and for ensuring consistency with standards and pronouncements issued by the International Auditing and Assurance Standards Board.

The FRC reports that International Standards on Auditing and related IAASB pronouncements are adopted as issued for application in Nigeria. The Institute of Chartered Accountants of Nigeria (ICAN) and the Association of National Accountants of Nigeria (ANAN) likewise indicate that ISA are applied as issued by the IAASB, without modification.

Accordingly, International Standards on Auditing in effect at the time of assessment are adopted in their entirety for application in all mandatory audits in Nigeria.

Current Status: Adopted

The Financial Reporting Council of Nigeria (FRC), established under the Financial Reporting Council of Nigeria Act 2011 (as amended), is responsible for issuing ethical requirements applicable to auditors and other professionals providing services to public interest entities. The FRC liaises with the Institute of Chartered Accountants of Nigeria (ICAN) and the Association of National Accountants of Nigeria (ANAN) regarding ethical standards and professional conduct.

Under the ANAN Act 1993, ANAN establishes ethical requirements for its members. ANAN initially developed a Code of Professional Conduct and Ethics aligned with earlier versions of the IESBA Code and reports that it updated its Code to align with the 2018 version of the International Code of Ethics for Professional Accountants.

Under the ICAN Act 1965, ICAN establishes ethical requirements for its members and, since 2018, has adopted the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board for Accountants.

While ethical requirements in Nigeria are aligned with the International Code of Ethics, adoption of the Code in effect at the time of assessment has not been demonstrated for all professional accountants in the jurisdiction. Accordingly, the International Code of Ethics is considered Partially Adopted in Nigeria.

Current Status: Partially Adopted

Under the Financial Reporting Council of Nigeria Act 2011 (as amended), the Financial Reporting Council of Nigeria (FRC) is responsible for establishing public sector accounting standards in Nigeria. The Act requires that standards issued by the FRC be aligned with those issued by the International Public Sector Accounting Standards Board.

The FRC developed and implemented a phased roadmap for the adoption and implementation of accrual-basis International Public Sector Accounting Standards at the federal, state, and local government levels. Accrual-basis IPSAS as issued by the IPSASB are applied in Nigeria for public sector financial reporting.

Accordingly, accrual-basis IPSAS in effect at the time of assessment are adopted for application by public sector entities in Nigeria.

Current Status: Adopted

Under the Financial Reporting Council of Nigeria Act 2011 (as amended), the Financial Reporting Council of Nigeria (FRC) is authorized to investigate and impose sanctions on registered professional accountants, including auditors and other professionals providing services to public interest entities, for non-compliance with applicable standards and ethical requirements.

Both the Association of National Accountants of Nigeria (ANAN) and the Institute of Chartered Accountants of Nigeria (ICAN) are legally authorized under their respective enabling Acts to establish and operate investigative and disciplinary systems for their members.

ANAN has established an Investigative Panel and a Disciplinary Tribunal, which operate as separate bodies. ANAN reports that its I&D system incorporates most SMO 6 best practices; however, certain administrative elements require further strengthening, including formalized case tracking mechanisms and procedures for reviewing complaints where no follow-up action has occurred.

ICAN is empowered to investigate and discipline members for breaches of professional standards and misconduct. ICAN reports that its I&D system incorporates major elements of SMO 6; however, disciplinary committees are composed solely of professional accountants, and the institute continues efforts to further strengthen alignment with SMO 6 best practices.

While investigative and disciplinary systems are established and operational for professional accountants in Nigeria through the FRC and the professional accountancy organizations, certain elements do not fully incorporate the requirements of SMO 6. Accordingly, the investigative and disciplinary framework in Nigeria is considered Partially Adopted and not yet fully aligned with SMO 6 requirements.

Current Status: Partially Adopted

Under the Financial Reporting Council of Nigeria Act 2011 (as amended), the Financial Reporting Council of Nigeria (FRC) is responsible for issuing accounting standards in Nigeria. The Act requires that standards adopted by the FRC be aligned with those issued by the International Accounting Standards Board.

Public interest entities, including listed entities, financial institutions, and other entities designated by regulation, are required to apply International Financial Reporting Standards as issued by the IASB in the preparation of their financial statements. Small and medium-sized entities are required to apply IFRS for SMEs. Sector regulators, including the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Exchange Group, and the National Insurance Commission, may impose additional reporting requirements within their respective jurisdictions.

International Financial Reporting Standards in effect at the time of assessment are adopted and required for application by publicly accountable entities in Nigeria.

Current Status: Adopted

Relevant Organizations

Association of National Accountants of Nigeria

Institute of Chartered Accountants of Nigeria

Financial Reporting Council of Nigeria (FRCN)

Relevant Legislation

Association of National Accountants of Nigeria CAP.A26 Law, 2004

Companies and Allied Matters Act, 1990

Financial Reporting Council of Nigeria Act, 2011

Guidelines/Regulations for Inspection and Monitoring of Reporting Entities, 2014

Institute of Chartered Accountants of Nigeria Act, 1965

Relevant Publications

ANAN, 2015 IESBA Handbook of Code of Ethics for ANAN Members, March 2016.

ANAN, ANAN Quality Assurance Review Guidelines, n.d.

ANAN, “ANAN Standards on Auditing”, 2009.

ANAN, SMO Action Plan, February 2018.

ICAN, “Nigerian Standards on Auditing”, April 2013.

ICAN, “SMO Action Plan,” December 2015.

IFRS Foundation, “IFRS Application Around the World?Jurisdictional Profile: Nigeria,” June 2016.

World Bank, Report on the Observance of Standards and Codes—Accounting and Auditing: Nigeria, June 2011.