The West African Institute for Financial and Economic Management (WAIFEM) has asserted that for the continent to compete in the global financial market, it has to adopt the use of International Financial Reporting Standard (IFRS).
The Director General of WAIFEM, Mr. Akpan Ekpo, explained that if African countries are to be integrated into the global financial system, policy makers should endeavour to have a pass mark for countries on the continent by setting higher standards of transparency, accountability and probity in the use of public resources, by adopting global accounting standards.
The Director General, who spoke during the opening ceremony of the regional course on IFRS organised by the institute, added that over 100 countries mainly in the European Union have adopted IFRS, maintaining that in the region, the adoption of IFRS was launched in Ghana in 2007 while Nigeria commenced the gradual adoption of IFRS in January, 2012.
According to him, worldwide adoption of IFRS is expected to be completed by 2015, urging all other countries in the region to fasttrack their migration and compliance to the new international accounting standards.
He stated that worldwide adaptation of IFRS will form the basis for comparability between enterprises operating in different jurisdictions and constitute a search light that international investors will use to make investment decisions in countries.
“It will also promote transparency and engender greater financial credibility. This would reduce cost of raising foreign capital as well as cost of compliance to single standard for financial reporting purposes for enterprises operating across several countries,” he said.
He pointed out that the primary objective of IFRS is to enable businesses worldwide to follow globally acceptable common set of financial accounting reporting standards which would not only facilitate national business operations, but also impart much needed transparency in financial disclosure.
He said globalisation has necessitated the need to have universal accounting standards applicable to all jurisdictions, adding that such standards would engender harmonisation of accounting frameworks and practices around the world.
“Through this achievement, evaluation of performances, adherence to best practices, comparison amongst players is made possible. Given the fact that economies in our sub-region are linked to the rest of the world, it is crucial that global accounting standards such as the IFRS form the basis for accounting and financial management practices in our sub-region” he said.
In his words, “It is against this backdrop, and considering the amount of work involved in the convergence process, that capacity building and skill acquisition development on the successful implementation of the IFRS provisions becomes imperative.”
He also stressed that the overall objective of the course is to acquaint participants with the provisions of IFRS, and equip them with the necessary information and skills to advise and guide the process of migrating to IFRS.
He noted that the course would make participants appreciate the need for global standards in the reporting of financial positions and performances; appreciate IFRS' merits over the current reporting systems and equip them with the knowledge of the method interpretation of financial statements prepared under IFRS system.