Attracting Investments With ADT

The Financial Reporting Council (FRC) of Nigeria, in collaboration with the United Nations Conference on Trade and Development (UNCTAD), initiated the implementation of the Accounting Development Tool (ADT) in Nigeria.
The ADT is a comprehensive toolkit designed to evaluate the legal, institutional, and human resource requirements necessary to enhance the accounting and corporate reporting infrastructure of a country. It enables countries to compare their capacity against international standards and best practices in accounting regulation.
Convergence towards international standards for consistent and reliable corporate reporting contributes to creating a conducive investment climate and financial stability. The Accounting Development Tool (ADT), developed by UNCTAD Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR), addresses the request from member States for guidance on how to facilitate such convergence.
Built on international consensus, the ADT has been designed and developed as a voluntary technical aid to support countries’ efforts towards building capacities in the domains of corporate reporting based on a guided self-assessment methodology and consensus-building among key stakeholders. The ADT uses a comprehensive and structured approach to identify and assess the legal, institutional and human resource requirements needed for a strong accounting and reporting infrastructure.
The overall objective of the ADT is to assist policymakers and other stakeholders in their efforts towards strengthening the accounting and reporting infrastructure for high-quality and internationally comparable corporate reporting. The ADT provides an approach, the methodology and instruments for quantitative measurement of existing reporting infrastructure at a national level in order to identify gaps when compared to international standards and good practices.
It can also serve as a basis for developing a strategy and an action plan for further improvements of corporate reporting based on the gaps identified and selected priority areas. Where relevant, the ADT can also help to assess country needs for technical assistance and to measure the impact of such assistance.
Chief executive officer of the Financial Reporting Council of Nigeria (FRC), Dr. Rabiu Olowo, speaking recently said the ADT project would help align the country with the global baseline for accounting practices.
According to him, the ADT allows companies in the country to align with the global baseline for accounting practices. “There is no better avenue to make this kind of investment other than strengthening regulatory authorities like ourselves. Our vision is to enhance regulatory assurance, to embed transparency, accountability and ensure that the users of financial statements can rely on them.”
Speaking further, Olowo, explained that the current economic hardship, according to research, encourages companies to do wrong things when it comes to financial reporting, which requires improved regulatory oversight.
“We are all aware of what is going on in Nigeria today, economic challenges or hardship if you like; research has shown that this period stimulates and encourages companies to do the wrong thing especially when it comes to financial reporting.
“For us as regulators we are very alert and awake to our responsibilities and your investment in Accounting Development Tools will only further strengthen our capacity to do our job very well. So we want you to leave here with the assurance that we are committed and not just taking on the project but to seeing the outcome as delivered,” he explained.
According to Netherlands consul-general Michel Deelen, “The Nigerian context sometimes makes companies be creative in their book keeping and we all know that is not good or beneficial to anybody also not to shareholders and also not to the public at large.
“So it is crucially important that you really have to do this to the best of your abilities and where we can assist you we will. It is interesting that many people will probably think but you have accounting firms who do this. In the Netherlands we believe a lot in the accounting firms, but after the financial crisis we realised we can’t rely on accounting firms anymore because they are part of the system.”