Financial Crime World

Title: New Financial Compliance Regulations in Nigeria: A Game Changer for Public Interest Entities

The Nigerian National Assembly passed the Financial Reporting Council of Nigeria (Amendment) Act, 2023, in April 2023, marking a significant shift in financial reporting and corporate governance for Public Interest Entities (PIEs) in the country. This article offers an overview of the key changes relevant to PIEs, which now include:

  • Governments and government organizations
  • Listed entities
  • Regulated entities
  • Public limited companies
  • Privatized entities
  • Concession entities
  • Entities engaged by any tier of government in public works
  • Licensees
  • Entities with an annual turnover of N30 billion or more

Key Changes for PIEs

1. Definition of PIEs

The expanded definition of PIEs under the FRCN Act includes:

  • Government organizations
  • Listed entities
  • Regulated entities
  • Entities with an annual turnover of N30 billion or more

2. Annual Dues

The new structure for annual dues payable by PIEs and registered professionals includes:

  • Minimum annual dues for individuals and firms
  • Dues based on market capitalization for publicly quoted companies

Deadlines for annual due payments:

  • 120 days post-year end for other entities
  • 120 days from January 1 for individual professionals and firms

3. Penalties for Non-payment

Failed to pay the new Annual Dues? The consequences include:

  • A penalty equivalent to 10% of the amount due for every month of default, cumulatively for up to ten months
  • Prosecution, convictions leading to fines of up to three times the amount due or as prescribed by FRCN, or imprisonment for a term not exceeding six months for companies and their CEOs

4. Accounts Adoption and Reviews

The FRCN Amendment Act now includes:

  • Adoption of documents and returns required by the Finance Act, 2021; Fiscal Responsibility Act, 2007; and Finance Control and Management Act, 1958
  • The FRCN no longer requires consent of PIEs/companies under investigation for document inspections and execution of warrants of distraint

5. Registration and Practice

Key considerations for professionals under the FRCN Act (as amended):

  • Annual renewal of registrations
  • Unregistered persons offering services to PIEs for remuneration face fines of up to N5 million, or imprisonment for a term not exceeding six months

Adapt to the new regulatory landscape and ensure continued compliance with the FRCN Act and other applicable legislations.