Nigerian Stock Exchange (NSE) has emphasised the importance of financial reporting, as it is very important because people can rely on the statements to take serious decisions.
Executive Director, Regulations Ms Tinuade Awe shared her perspective on the quality of financial reporting in a recent forum on corporate governance in Lagos.
She said people use those statements to move from one point to another, and if the quality is poor it will lead to decisions taken from faulty information.
The Executive Director stated that Directors are responsible for driving corporate governance code in companies, guided by the provisions of the Company and Allied Matters Act (CAMA) and the Investments and Securities Act.
She explained that directors cannot outsource the responsibility of corporate governance and must have knowledge of financial statements and reports.
According to her, she directors must be able to allocate risk, ensure they strategize in management risk, ensure the right talent pool to execute the strategy and ensure systems are in place.
Awe added that directors must understand the business of the company, even to the role of the auditors, both external and that in internal control.
“I think it is very important that we reinforce to directors that they’re responsible for financial reporting, they are responsible for the quality of it, that responsibility can have adverse consequences for them if it’s not taken seriously and the way to deal with the responsibility is to ensure that you get appropriate management to run everything in your company.
“The control functions with compliance audit, internal control, the Chief Finance Officer’s office and also the auditors cannot be compromised,” Awe said.