History of Accounting in Nigeria

The history of accounting in Nigeria isn’t complete without a mention of ICAN, FRCN, and Akintola Williams. 

Which begs the question…

What roles did Akintola or ICAN play in the development of accounting in Nigeria? Are there other people, bodies, or events that equally played a part–and to what extent–in shaping modern-day accounting in Nigeria?

Let’s find out!

The origin & Development of accounting in Nigeria

Opinion differs on the origin of accounting in Nigeria but there’s no denying the fact that accounting wasn’t recognized as a profession in Nigeria prior to 1957. Plus, there were fewer accountants, and the economy was pretty conservative.

1957 marked the first step towards the development of accounting with the then newly drafted Nigeria Constitution designating accounting as a profession.

It got better in 1960 with the country’s independence and the discovery of oil in commercial quantities. 

These events didn’t only provide enough incentive for qualified British-trained Nigerian accountants to return, but it also underlined the need for a local accounting body that can train, examine, and certify accountants to meet growing demands.

Establishment of Accounting Bodies In Nigeria

The first accounting body–Association of Accountants in Nigeria (AAN)–was established in the year 1960. This is all thanks to increasing awareness and demand for accounting, oil discovery, post-independence economic boom, and the contribution of returning British-trained chartered accountants. AAN transformed into the Institute of Chartered Accountants of Nigeria (ICAN) in 1965 and was charged with the responsibilities of setting accounting standards; regulating procedures and practices; and registering, training, and certification of accounting professionals in Nigeria.

Akintola Williams in 1950 became the first Nigerian to qualify as a chartered accountant in England and Wales and was admitted into the Institute of Chartered Accountants of England and Wales (ICAEW). On top of the roles he would later play in the establishment of ICAN, he became the institute’s first president in 1965. Williams’s achievements in accounting and his contributions to ICAN earned him recognition as the father of accounting in Nigeria.

ICAN remained the first and only body that regulated the accountancy profession up until the 1st of January, 1979 when the Association of National Accountants of Nigeria (ANAN) was formed in Jos to train, examine and certify accountants in Nigeria. ANAN was registered and became chartered on 28th of September, 1983 and 25 of August, 1993 respectively.

ANAN which nailed ICAN’s monopoly had been preceded by the registration of the Chartered Institute of Taxation of Nigeria (CITN) in 1992, with the main objective of regulating the practice of taxation in Nigeria. 

Before CITN, tax practices were dominated by ICAN members. ICAN members felt threatened by this loss of jurisdiction. This forced many ICAN members to join the Institute of Taxation. This threat lies principally with provisions of CAMA that leave room for the creation of other accounting bodies.

It’s worth noting, that while the establishment of ICAN was a direct response to the increasing popularity and accounting demands of that time, politics and ICAN’s monopoly (annual rate of passing ICAN examinations at one time was 5%, for example) greatly influenced the establishment of ANAN.

Implementation of Accounting Standards

Pre-1965, there were no defined accounting standards in Nigeria. ICAN (then Association of Accountants in Nigeria) started to develop a set of accounting standards known as SAS in 1960. SAS was applied to book-keeping, measurement and disclosures, and in the preparation of financial statements. 

From 1965 to 2010, SAS was used as legal accounting standards by companies until 2011 when the bill for the Financial Reporting Council of Nigeria Act was passed into law.

Challenges facing the Accounting Profession in Nigeria as of Today

There’s, first, the dearth of well-equipped accounting institutions, many of which are constrained in their ability to train enough accounting graduates and accountants for both the private and public sectors of the economy.

And talking about the ineffectiveness of some accounting bodies (e.g. FRCN), factors such as weak enforcement mechanisms, inadequate funding, and the lack of a conceptual framework for developing accounting standards that meet the current financial information needs, have all been identified.

Other factors inhibiting the development of the accounting profession in Nigeria include insufficient research facilities,

non-availability of current professional materials, and the lack of specialized and educational journals on accounting research.

Wins for the Accounting Profession in Nigeria so Far

Over fifty years since its recognition as a profession in Nigeria, accounting has kept its characteristics of nobleness and relevance.

Not only that, Nigeria has been supported by the founding of universities, polytechnics, and colleges of technology offering accounting courses. The system of accrediting accounting training centers of universities departments through the National Universities Commission (NUC), National Board for Technical Education (NBTE), and ICAN has helped to raise and maintain the standards and quality of graduates and programs. 

Also, with the establishment of the Institute of Chartered Accountants of Nigeria (ICAN), ANAN, and Financial Reporting Council of Nigeria (FRCN), there has been a notable improvement to the quality of the accounting profession in Nigeria, coupled with consistency and better standards in the financial reporting process. ANAN in particular is complementing the effort of ICAN in increasing the number of certified accountants that are available to organizations and businesses.

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