ICAN 2016 essay entry Adekunbi Ademola

ICAN 2016 essay entry Adekunbi Ademola

So, the deadline for the 2017 edition of the ICAN essay competition is right around the corner, but here is a resource that might be helpful for you, if you haven’t submitted your entry yet. I apologize for just putting it up, but it’s better late than never, isn’t it?

Going through past winning entries is helpful because it can give you an idea of what the judges want. Use this for guidance in a general sense but don’t let it detract from your originality and personal style. Your zest for the topic will be much more important in making your entry stand out.

If you’d prefer to download it in PDF format, scroll to the end of the post and do just that. Please read, air your thoughts in the comment box and share.

 

THE NEXT 50 YEARS OF PROFESSIONAL ACCOUNTANCY PRACTICE: MAKING ICAN GLOBALLY RELEVANT

ABSTRACT

The purpose of this paper is to closely examine the activities of the Institute of Chartered Accountants of Nigeria since its establishment 50 years ago, analyse the role it has played in the development of accounting practice in Nigeria and make projections on the steps that will be necessary to achieve the institute’s goal of reaching global relevance over its next 50 years of existence. First, an in-depth exploration is taken into the role and functions performed by a modern professional accountant, such as are members of ICAN. Next, an analysis of the activities of the organization spanning the education sector, ethics and regulation of the profession, and other sectors that have manifest effect on the profession and society at large. The future is then projected, with projections and suggestions of agenda made to fulfil the institute’s goal of global relevance, including adoption of information technology, co-operation with other organizations and adherence to international standards.

INTRODUCTION

Accountants play a very important role in society. Their business of the measurement, calculation and disclosure of financial information is integral to the work that is done by managers, tax authorities and other bodies that are in the business of taking decisions based on the allocation of resources in one form or the other. The governments of every country around the world place heavy reliance on the data they are given by accountants.

ICAN, for its own part, has in the 50 years since its establishment, contributed in various ways to the accounting practice in Nigeria and around the world, standardising the education of entrants into the profession, promoting academic research and ensuring strict adherence to ethics by its members. Having accrued much success in the past 50 years, sights must now be turned toward the future and the steps necessary to ensure consolidate on past gains in a bid to ensure that over the next 50 years, remarkable success will again be recorded, with the goal being to achieve global prominence in accounting practice.

BACKGROUND OF THE ACCOUNTING PROFESSION

The rise of accountants and the profession of accounting to its present level of prominence can be traced more than seven thousand years into the past; to accounting records that have been found in Mesopotamia and other ancient civilizations. More recently though, the American stock market crash of 1929 showcased the fact that a lot of the companies that were listed on the exchange had been falsifying reports and duping shareholders for years, as a result of which stricter laws were imposed that increased the functions of accountants in vetting the financial books of companies before they were allowed to be listed on the exchange. This highlights one of the functions of the accountant that is still an important one in these modern times: the protection of shareholders and customers via the independent verification of a company’s financial statements.

Within the past 50 years, a number of great advances were made in accounting practice around the world, one of the most momentous being the passage of an Act by the Nigerian parliament setting up the Institute of Chartered Accountants of Nigeria. The purport of the Act was to consolidate existing accounting and auditing organizations with the goal of providing an effective structure for the training and certification of accountants in Nigeria. Starting with just 250 members, the organization since took upon itself a lofty mission statement: “To Produce World-Class Chartered Accountants, Regulate and Continuously Enhance Their Ethical Standards and Technical Competence in the Public Interest.”

ROLE OF THE PROFESSIONAL ACCOUNTANT IN SOCIETY

The professional accountant of today, and over the past 50 years, whether in Nigeria or beyond its shores, serves in a number of different capacities, depending on the particular aspect of accounting that in which he is functioning.

Financial accounting, which is at the heart of the profession, requires accountants to analyse the raw data of a company’s financial activities, draw the necessary conclusions and then collate their findings into a form that is usable by other parties. These parties who utilize the information contained in a financial accountant’s reports may be investors, regulators or other bodies who do business with the company in one form or the other. The most easily recognizable example of a financial accountant’s work in modern society today is the financial reports that some countries, including Nigeria, require publicly traded companies to publish on an annual basis. A lot of investors, and even the government, rely on accountants, acting in conformity with generally accepted accounting principles (GAAP), to provide them with accurate data, so as to make the best investment or policy decisions.

Management accounting is another aspect of a modern accountant’s practice. Here, the accountant focuses on analysing data and reporting information intended to guide managers while they are taking decisions that will affect an organization. The role of the accountant is to give a cost-benefit analysis that will illustrate how different decisions might impact on the company’s finances, thus enabling them to make the most profitable decision. A major difference between the role of an accountant in Management accounting and one in financial accounting is that while the financial accountant analyses an reports on data from the past, as in; analysing 2014 financial activities in 2015, the management accountant makes financial projections for the future. Across the world, management accountants working within the Global Management Accounting Principles (GMAP) that were created by CIMA (Chartered Institute of Management Accountants) in 2014, chart the business strategies of the world’s top companies to the benefit of the economies of countries around the world.

Auditing is another integral service that professional accountants provide. It involves the unbiased analysis and evaluation of the financial statements of a company or other organization, with the goal being to arrive at a conclusion and express an opinion on the veracity and fairness with which the company made the financial statements in question. The auditor is required to take particular notice of the extent to which generally acceptable accounting practices (GAAP) were followed and point out deficiencies. The activities of auditors have been the basis upon which many scams and illicit financial activities have been discovered. Thus, the accountant acting in this respect helps to ensure that companies operate legally, keeping the monies of investors safe.

Tax accounting is yet another major field in which today’s professional accountants work. Operators in this sector are saddled with the responsibility of assisting individuals and corporate entities in the analysis and preparation of their tax payments and returns. Accountants work to make sure that the government gets its due in tax to utilize for the benefit of the society while advising their clients so they are fully aware of the procedure and their options in light of each respective country’s tax laws and regulations.

ROLE OF THE INSTITUTE OF CHARTERED ACOUNTANTS OF NIGERIA

In line with its mission statement: “To Produce World-Class Chartered Accountants, Regulate and Continuously Enhance Their Ethical Standards and Technical Competence in the Public Interest,” the Institute of chartered accountants of Nigeria, with the help of its current membership of over 39,000 trained and certified chartered accountants, has taken diverse steps in the cause of the accounting profession. It would not be out of place to say that over its 50 years of existence, the organization has been able to take the profession to continually greater heights, ensuring that practitioners are fully qualified and equipped to function in the rigorous conditions of the corporate environment.

The most visible, and perhaps most important sector in which the efficiency and effectiveness with which ICAN works may be seen is education, in the twin aspects of undergraduate training in accounting as well as in the area of screening of new entrants into the profession, certifying the most worthy ones among them as chartered accountants with all the dignity and responsibility that the title connotes.

In the area of education, ICAN has contributed to the successful accreditation, according to rigorous international best standards, of some 125 tertiary institutions to run full time courses in accounting. The involvement of ICAN in the accreditation of undergraduate is most apposite because the institute is in the best position to determine the skill-set that an entrant into the profession will require in order to be able to provide quality service. Apart from the accreditation, ICAN has set up different funds and grants to support students and research into accounting practice.

On the other hand, as relates to the certification of chartered accountants, ICAN began to conduct examinations of prospective chartered accountants in 1970 and in the words of Mr. Chidi Ajaegbu, the immediate past president of the institute: “it is on record that the integrity of its processes has never been compromised, it has never leaked…” Apart from the uncommon integrity visible in the examination process, it is also worthy of note that the exams are set on the international education standards put in place by the International Accounting Education Standard Board (IAESB). This ensures that chartered accountants who have been certified by ICAN do not encounter any employability problems whatsoever, whether in the local or foreign job markets. Further on global recognition employment mobility, ICAN has gone a step further to make twinning arrangements with the Institute of Chartered Accountants in England and Wales (ICAEW) and the Chartered Institute of Public Finance and Accountancy (CIPFA), thereby ensuring parity in the qualifications given by the institute and those of other institutes abroad. This has been working to the benefit of chartered accountants by making it much easier for them to fit in and be accepted as proficient chartered accountants wherever they go.

On the question of the global relevance of ICAN, one only needs to look at the 19th edition of the World Congress of Accountants (WCOA) organized by the International Federation of Accountants (IFAC) to be able to see very clearly, that ICAN has gotten itself a place at the forefront of accounting practice around the world, and is steadily making gains and consolidations on that position. The Academic partner prize that was sponsored by ICAN was one of the most prestigious prizes at the congress, and it was eventually awarded jointly to two professors for their cutting-edge research titled “Future Perspectives on the Auditing Profession – A Scenario Analysis.” They were presented the awards by the then president of ICAN, Mr Chidi Ajaegbu.

The reputation of the institute and its members of being reliable recently reached new heights when an agreement was reached with a bank to allow members utilize a credit card to access interest and collateral-free credit, an unprecedented initiative among similar organizations. This initiative is quintessential of the capacity building and in-house benefits that the institute has been working hard, over the past 50 years, to provide its members with.

Based on all the above illustrations above, it is clear that since 1965 till date, the Institute of Chartered Accountants of Nigeria has gone far in fulfilling its mission statement and benefitting its members as well as society at large in novel, progressive ways.

AGENDA FOR THE FUTURE

  • TECHNOLOGY

Technology has played a massive role in the streamlining and advancement of various professions, and accounting is not an exception. The institute has already taken some steps to this effect by getting a partnership with Sage, an accounting software firm, and helping to advertise their products and services to its members. This policy should be continued, and there should even be a more concerted push for members to adopt computer software packages and integrate them into their practice.

The imperative for this course of action lies in the fact that there is likely to be faster adoption of such software by accountants in advanced countries, due to their noticeably increased exposure to using computers in various areas of their professional life. Failure to ensure adoption of these software solutions across board will eventually result in a situation whereby members of the institute will be lagging behind their counterparts in other countries when it comes to the internationally recognised best practices of the profession, which, as can be seen in other professions, constantly update to reflect software integration. Further, an institutional push for increased adoption of information technology by accounting professionals will increase the ethical reputation of members of the profession, with the general public by relieving the accountant of unnecessary workload and thus reducing the possibility of damaging mistakes as well as making them less likely to doubt the veracity of accountants’ reports if they are in a format that is easily cross-checked and verifiable.

  • ADHERENCE TO INTERNATIONAL STANDARDS

Over time, the international accounting industry has been in a state of evolution to keep up with the realities and exigencies of practice in the modern world. A number of different standards, frameworks and principles have been adopted by various bodies recognised as leading the profession across the world. In order for ICAN to gain more international recognition and relevance, as well as position itself and its members individually to take the centre stage in the profession, there must be a deliberate policy of prompt adoption and implementation of such standards and guidelines as and when they are put in place, or suggested by such international bodies.

Doing this will help to portray the institute as being one comprised of forward thinking professionals who embrace positive change and repositioning in their practice of the profession. An illustration of this can be found in the International Public Sector Accounting Standards that were recently put forward by the International Federation of Accountants (IFAC) and International Public Sector Accounting Standards Board (IPSASB). The benefits of the IPSAS are myriad, and they were even described recently as “a subtle transformation tool” for Nigerian accounting practice by a writer in the institute’s magazine.  The ongoing adoption of the standards has already been a boon to ICAN international stature as can be seen from the recognition given by the President of the International Federation of Accountants, when he spoke on the matter before the commencement of ICAN’s 44th Annual Accountants’ Conference.

Joint Audit is another area that the institute would do well to continue its advocacy for. Adoption of the system by government, its parastatals and other corporate entities would increase the level of transparency in the industry, as perceived by people on the outside, and would definitely work to the benefit of the institute’s strategy to be a force to reckon with on the international scene.

 

 

  • INTER-ORGANIZATIONAL CO-OPERATION

Recently, the news was awash with news of the partnership agreement that was formulated among ICAN, the Nigeria Bar Association (NBA) and the Chartered Institute of Stockbrokers (CIS). The intention of the agreement, to collaborate in the socio-economic development of Nigeria is a worthy one, and further collaborations in the same vein offer ICAN the opportunity to extend its reach into previously uncharted territory, getting a say in the policy strategies and activities of other major organizations and professions, as well as society at large. Also, policy should be directed towards seeing an end to the perennial conflicts between ICAN and other accounting bodies as they only serve to portray the institute in a bad light.

Away from the home front, such twinning arrangements as the institute made with the Institute of Chartered Accountants in England and Wales (ICAEW) and the Chartered Institute of Public Finance and Accountancy (CIPFA) have yielded bountiful fruits in increasing the respect accorded its members internationally and more effort should be expended to consolidate the existing ones and attain similar arrangements with other accounting bodies in different countries, the benefits for members and the institute as a whole will definitely multiply, giving ICAN a more secure and respected place in the international scene.

  • RESEARCH PROMOTION AND CONTRIBUTIONS

Sequel to the expatiation made above about the role that ICAN is currently playing in the accounting education of students in various tertiary institutions across the country, the organization’s efforts in the area of encouraging research into accounting practice should be stepped up in order to assure a place as one of the industry leaders in Africa and around the world over the next 50 years and beyond.

More study grants and funds should be channelled to students, whether undergraduate or postgraduate, who are undertaking innovative research. The success and eventual returns of such results will go along away to boosting the reputation of the Institute on the world stage, literally even; if the research were to win one award or the other, similar to Academic Partner prize funded by ICAN at the World Congress of Accountants last year.

CONCLUSION

It is now crystal clear that ICAN has spent the first 50 years of existence judiciously, having contributed immensely to the development of the accounting profession in Nigeria and positioning itself as a leading organization within the country and beyond its shores. Despite all the achievements of the past, in its quest to achieve further global relevance and reputation, securing a place of itself at the very forefront of accounting practice globally, there are certain steps that should be taken, including increased adoption of information technology, continued research promotion, enhanced co-operation with other organizations within and outside the country, and adherence to international standards. Concerted efforts to follow these agenda will definitely place ICAN all the way at the forefront of global accounting practice, within the next 50 years.

REFERENCES

 

http://www.vanguardngr.com/2015/04/ican-recounts-achievements-in-50-years/

Droms, William G.; Wright, Jay O. (2010), Finance and Accounting for nonfinancial Managers: All the Basics you need to Know (6th ed.), Basic Books, 2010

Needles, Belverd E.; Powers, Marian (2013). Principles of Financial Accounting. Financial Accounting Series (12 ed.). Cengage Learning.

“Department of Accounting”. Foster School of Business. Foster School of Business. 2013. Retrieved 4 August 2015

IFRS Foundation, 2012. The move towards global standards. Retrieved on August 5, 2015.

“Responsibilities and Functions of the Independent Auditor” (PDF). AICPA. AICPA. November 1972. Retrieved 5 August 2015.

THE NIGERIAN ACCOUNTANT _April_2015

 

Download the PDF file by clicking on: The Next 50 Years of Professional Accountancy Practice:Making ICAN Globally Relevant