NEW LOOK ANNUAL REPORTS.

When last did you read through an annual report published in Nigeria? Never? Lately? Or you have intact have only being glancing through with eagle eyes open for profit figures and dividend payable if any?

Well you are in for a mild shock. To really get the true and fair position of the state of affairs of a company these days, you have to wade through pages and pages of explanatory statements, data upon data dealing things like how many times directors attended called meetings, how much they are paid as remuneration, naira and kobo statement of corporate social responsibility within the year, gender bias in employment, statement of directors responsibility and lots and lots more.

Then of course, you have the statement of financial position , that is Balance Sheet of yore, and statement of comprehensive income alongside cadhflow statement and changes in shareholders capital.

After these figures, then more pages and pages of notes to the financial statements follow detailing assumptions and basis for computation and provision as appropriate.

It is indeed very bulky and almost too detailed but then, it is in line with worldwide reporting requirements and in line too with the law establishing the Financial Reporting Council of Nigeria since 2011 after erstwhile more toothless Accounting Standards Organisation of Nigeria was rested.

So far, the FRC has come up eight published rules to guide preparation of public and corporate annual accounts since it was established.
Rule 1 asked that all such corporate reports be certified by CEOs and Chief Finance Officers of the companies using pre- registered personal number codes; rule 2 demands same of all external professionals engaged in the preparation and audit of the report while rule 3 asks that amounts paid for audit and non audit services be disclosed.
Rule 4 deals with statement of compliance with all statutory transactions, rule 5 demands that copies of all qualified reports other than unqualified reports, be sent to the FRC she rule 6 demands copies of annual reports within 60 days after approval by the board of directors and within 30 days in the case of reports by government agencies and non- profit organisations.

The most controversial and tough rule to comply with so far is rule 8 which rightly demands that so long as these annual reports are being prepared to meet Nigerian statutory requirements, the presentation currency must be the Naira irrespective of the primary economic environment companies operate in.

In other words, no stating of figures in dollars, pound sterling , or any other currency other than the Naira as presentation currency.
But then, one can not but wonder if the average shareholder or stakeholder in Nigeria is equipped to go through bulky reports particularly full of facts and figures? Is all these making the average shareholder to be better informed about the company or less?

It goes without saying though, the fact so much is demanded to be disclosed and certified these days makes it easier to compare companies by those who know how and want to, forces many executives to be accounting literate and conscious of best practices and should make Nigerian annual reports far more useful to foreign investors.

It is also quite a relief to many organisations that with the dawn of internet and social media, only limited hard copies of annual reports may be needed these days. So companies can even do without it, all you need do is download from the website.