The Financial Reporting Council (FRC) of Nigeria, previously the Nigerian Accounting Standards Board (NASB), has evolved from a private initiative to a statutory institution charged with promoting transparency and credibility in financial reporting. Initially established by the Institute of Chartered Accountants of Nigeria (ICAN) in 1982 and formally recognised through legislation in 2003, its powers were significantly expanded with the FRC Act of 2011. The 2011 Act broadened the Council’s mandate to include not just accounting standards, but also auditing, actuarial, valuation, and corporate governance standards, placing it among the most critical regulatory bodies for financial integrity in Nigeria.
In 2023, the FRC Act was amended to address weaknesses in the original legislation, particularly in areas of regulatory clarity, corporate governance, and stakeholder representation. These changes included improved enforcement mechanisms, a stronger corporate governance framework, expanded board inclusion, and a clearer definition of financial obligations for public interest entities (PIEs). Section 33 of the amended Act introduced a structured framework for annual dues, differentiating between listed and unlisted entities based on the level of regulatory scrutiny each already faces. Such a structure aligns with international best practices and was designed not only to strengthen regulatory operations but also to enhance Nigeria’s investment credibility.
Despite the transparent and participatory process that led to the amendment, including multiple readings in the National Assembly, public hearings, and eventual presidential assent, the Organised Private Sector of Nigeria (OPSN) has pushed for a reversal or suspension of certain provisions, particularly Section 33. OPSN argues that the dues imposed on unlisted PIEs are excessive and have sought an immediate cap of N25 million, alongside calls for portal reconfigurations, rule suspensions, and penalty waivers.
Their demands extend beyond appeals; they are framed as urgent actions the FRC must comply with, backed by a recent presidential directive. OPSN further proposes legislative changes outside formal National Assembly processes, suggesting a 10-day implementation clinic that bypasses democratic procedures in favour of negotiated enforcement with ministry officials and sector leaders.
This development raises a deeper concern: the weakening of regulatory institutions by powerful economic interests. The FRC is a statutory body whose authority stems from an act of the National Assembly. It was created to be independent and professionally guided, not subject to the day-to-day pressures or dictates of regulated entities. The attempt to use a presidential directive to override legislation passed by lawmakers undermines the doctrine of separation of powers, erodes the credibility of Nigeria’s legal framework, and places the regulator in an impossible position: comply with the law, or submit to political convenience.
Globally, institutions like the FRC UK or PCAOB in the United States are successful because they enjoy statutory independence. They operate with clear mandates, free from undue interference by those they regulate. Allowing regulated entities such as OPSN to dictate the enforcement, modification, or even suspension of laws through backchannels sets a precedent that can embolden future corporate resistance to regulatory oversight.
The misunderstanding around section 33 …
Section 33, as amended, does not unfairly target unlisted entities. It merely seeks to balance oversight by accounting for the regulatory gaps that exist for entities outside capital markets. While listed companies are subject to constant monitoring by the Securities and Exchange Commission (SEC), the Nigerian Exchange (NGX), and other statutory bodies, unlisted PIEs often fall outside that net. The FRC’s approach therefore ensures that financial oversight is consistent across the board. The use of turnover as a basis for dues is not unique to Nigeria; in fact, countries like Kenya apply even stricter models.
What OPSN seems to be asking is for exemption from regulatory dues, suspension of compliance mechanisms, and immunity from retrospective enforcement, all without recourse to the legislative process. This is not a defense of investment; it is a distortion of the regulatory process. If every regulated entity demanded the same flexibility, regulatory chaos would ensue.
The legislative process cannot be undermined …
The FRC Amendment Act 2023 followed due legislative procedure: draft initiation, readings in both chambers, stakeholder consultations, public hearings, and eventual assent. The argument that it should now be revised by executive fiat or administrative clinics invalidates that process and risks opening a backdoor for legal manipulations that could further discourage international investors seeking predictability in Nigeria’s legal environment.
If OPSN believes that there are errors or burdens in the current law, the appropriate avenue remains the National Assembly. Legislative reform is not a closed door. What is unacceptable is the effort to enforce change through political pressure and administrative shortcuts. This approach may be expedient in the short term, but would have long-term consequences for regulatory integrity and the rule of law in Nigeria.
FRC’s key milestones in 18 months …
Over the last 18 months, the FRC said it has made remarkable progress in fulfilling its mandate through a series of transformational initiatives. A major step was the digital transformation drive, which led to the creation of a National Repository for Financial Statements, providing a centralised platform for transparency and accessibility. In alignment with emerging global standards, the Council also established the Adoption Readiness Working Group (ARWG) to guide Nigeria’s transition into sustainability reporting. This group has been instrumental in facilitating free, industry-specific webinars and training sessions that are helping entities comply with the IFRS Sustainability Disclosure Standards.
The FRC further expanded its operational scope through the establishment of two new directorates: the Actuarial Directorate and the Valuation Directorate. These new units are focused on strengthening regulatory oversight in critical but previously under-regulated areas. In addition, the Council created the Islamic Financial Services Division to provide tailored regulatory oversight for non-interest financial services, ensuring that Nigeria’s diverse financial landscape is fully covered.
The Council has also issued and implemented new regulatory frameworks, including the Internal Control over Financial Reporting (ICFR), Rule 13, and Rule 14. Alongside these new rules, the Council has commenced audit firm inspection visits as part of its strategy to enhance audit quality and promote accountability in the financial reporting process.
In the area of corporate governance, the Council recorded another milestone by issuing the Code of Corporate Governance for Small and Medium Enterprises (SMEs). This code aims to deepen ethical business practices and governance structures within Nigeria’s growing SME sector. Moreover, the FRC launched advocacy programmes to promote actuarial education and the professional development of practitioners in Nigeria. To further strengthen professional capacity, the Council conducted a “Train the Trainers” workshop for MSME accounting practitioners in collaboration with UNCTAD ISAR. Internally, it has also initiated structured regulatory capacity-building programmes for its staff to ensure that it remains a technically sound and forward-looking institution.
FRC comparative fee structure …
An examination of regulatory fees in other jurisdictions shows that Nigeria’s FRC maintains a fee structure that is both globally aligned and economically balanced. In Nigeria, annual dues range from 0.02 to 0.1 percent of turnover, depending on the size and nature of the entity. Ghana, by contrast, applies fees based on gross revenue or flat amounts depending on the size of the entity, with a minimum charge of GHS 2,000 and no upper limit. In South Africa, the fee structure ranges between 0.01 to 0.05 percent of annual turnover.
This comparative analysis illustrates that the FRC’s approach falls well within the acceptable global regulatory fee benchmarks. The design of the fee structure is a deliberate effort to ensure that the Council remains financially sustainable while keeping costs fair and proportionate to an entity’s capacity. It reflects an understanding of the diverse financial realities of different types of entities, without compromising the integrity of the regulatory system.
Concerns over perceived discriminatory application of dues …
Despite the Council’s intentions and efforts, there have been concerns expressed regarding the perceived discriminatory application of the annual dues framework. A major point of contention has been the differential treatment between listed and non-listed Public Interest Entities (PIEs). However, a closer look at the regulatory ecosystem reveals the basis for this approach.
The Council explained that listed PIEs are already embedded in a more comprehensive and structured regulatory environment. They are subject to multiple layers of oversight from agencies such as the Securities and Exchange Commission (SEC) and the Nigerian Exchange (NGX). These entities often have dedicated compliance units and more robust internal systems to manage regulatory obligations. By contrast, many non-listed PIEs lack such support systems and do not fall under the purview of sector-specific regulators. This creates a gap in oversight that the FRC is uniquely positioned to fill.
To ensure fairness and proper coverage, non-listed PIEs are expected to contribute proportionately to the cost of regulatory oversight. This expectation is not punitive but necessary. It enables the Council to deploy the required resources for effective supervision across the board. The FRC’s approach is built on a model of fairness, recognising that while listed entities have external checks, unlisted PIEs depend more directly on the FRC for regulatory guidance and enforcement. As such, the revenue-based assessment ensures all entities, irrespective of listing status, contribute their fair share to sustaining the country’s financial reporting infrastructure.
This effort to enforce equity and financial responsibility does not deviate from global norms. Rather, it reflects an honest attempt to adapt global principles to Nigeria’s unique regulatory landscape. The FRC remains committed to creating a transparent, inclusive, and sustainable reporting environment while safeguarding the financial health of the regulatory system itself.
A test of Nigeria’s commitment to rule of law …
This controversy is more than just a dispute over financial dues. It is a test of how far Nigeria is willing to go in protecting the independence and legitimacy of its institutions. The government must now decide whether it will support FRC in upholding laws passed by the National Assembly or bow to external pressure that could erode institutional credibility.
The FRC was not set up to be popular; it was established to be effective. Its role is not to please but to protect public interest, financial integrity, and long-term economic stability. If stakeholders like OPSN truly care about improving the investment climate, their efforts should focus on constructive legislative engagement, not regulatory capture. In upholding the FRC’s independence, Nigeria would be sending a clear signal to the world: that it is serious about reforms, transparency, and the rule of law.
