Nigeria’s apex capital market regulatory agency, Securities and Exchange Commission (SEC) has extended the compliance deadline for the implementation of new financial rules.
The new rules border on internal controls, auditing and directors’ responsibilities to December 31, 2023.
The new rules were published in March 2021 with an initial implementation and compliance deadline of December 31, 2021.
In a circular at the weekend, SEC stated that the extension was to afford the companies adequate time for effective implementation of the new rules.
Under the new rules, chief executive officers and the chief financial officers or officers or persons performing similar functions in public companies filing periodic or annual reports would each sign a personalised certification of their compliance with the requirements of the referenced sections of the ISA, 2007.
The new rules also saddle the board of a company with the function of effectiveness of internal control system. The rules require that a public company shall establish a system of internal controls over its financial reporting and security of its assets and it shall be the responsibility of the board of directors to ensure the integrity of the company’s financial controls and reporting. The board of directors of a public company shall report on the effectiveness of the company’s internal control system in its annual report.
Also, the rules require annual management’s assessment and report on internal control over financial reporting; including provisions that the annual report shall contain a statement of the management’s responsibility for establishing and maintaining adequate internal control framework for the company and a statement identifying the control framework used by management to conduct the required evaluation of the effectiveness of the company’s internal control over financial reporting.
Also, external auditors are required to report on internal controls of public companies as well as issue a statement as to the existence, adequacy and effectiveness or otherwise of the internal control system of the public company. Such report shall be close to the corresponding opinion page issued by the company’s external auditor as a result of the normal audit, or in a portion of the document immediately preceding the company’s financial statement.