HISTORY OF ACCOUNTING IN NIGERIA ALL YOU NEED TO KNOW

History Of Accounting In Nigeria – All You Need To Know

The history of accounting in Nigeria is as important as Nigeria’s history particularly before and after the era of independence. Prior to Nigeria’s emergence into the class of developing nations, no relevance was given to accounting and Nigerians hardly engaged the services of accountants. At the time, many Nigerians didn’t realize the need for the accounting or how to enroll in it as a professional course.

With the improvement in multinational trade which encouraged the adoption of a modern economic system, many Nigerians began realizing the need for accounting as a relevant profession for improving the country’s modern sector. Today, no learned Nigerian would doubt the fact that accounting has become one of the most contributive professions to Nigeria’s economic sector. Before discussing the history of accounting in Nigeria further, it is worthy to give a precise definition of accounting and what it covers as a profession.

  • What Is Accounting

In its entirety, accounting is a professional course that contributes immensely to the growth of any nation most especially in aspect of the economy. Therefore, it serves a great purpose in reckoning financial activities both in the public and private sectors. Through accounting, accurate financial statements are generated on the expenditure made or incurred by governments and firms. Also, accounting helps in comparing credit and debit balances which must be ascertained for a company, organization, government or firm to realize whether it is making profit or loss after the deduction of taxes.

As a profession, accounting is relevant to both macro-economic and micro-economic aspects of a nation. It, therefore, covers a broad range of components adopted in decision making and in carrying out economic activities. Accounting components are vital in executing socioeconomic activities like capital formation, project evaluation, and economic planning. Amongst others, accounting components may include auditing, business accounting, social accounting and government accounting.

History Of Accounting In Nigeria

Prior to the evolution of accounting as a profession, humans had primitive ways of managing resources and ascertaining profits after trading activities. Based on business objectives, humans adopted their primitive understanding of accounting in managing businesses, controlling financial assets and calculating the profit made from production/sale of commodities.

Meanwhile, professional accounting evolved through man’s awareness that accurate summaries of financial transactions should be made in order to ascertain the status of a business in relation to profit and loss. By and large, the need for adequate evaluation and control of financial transactions resulted from several factors including trade expansion, capital growth, wealth accumulation and increased levels of production. By reason of this, accounting is certainly the most effective solution to the overwhelming demands of individuals, firms, and governments to have accurate records of financial and economic activities. Therefore, it is beyond doubt that both developing and developed societies need professional accounting bodies to handle certain aspects of the economy. Regarded as a developing nation, Nigeria is never exempt from this need and by reason of this, we shall discuss the history of professional accounting bodies in Nigeria later in this article.

The Concept of Accounting Education in Nigeria

Like many other aspects of education, accounting education is of paramount importance and it embodies the task of instructing accountants systematically. The instructions given in this regard will educate accountants and help them realize the skills and expertise that should qualify them for professional qualifications in the field of accountancy. In addition, accounting education polishes accountants and widens their understanding of accounting.

On any grounds, accounting is a complex field and prolonged education, hard work, and supplementary training are usually required to succeed in the profession. While practicing accounting as a profession, accountants still go extra lengths to acquire profound accounting education. In that case, accounting education in Nigeria should be regarded as a continuum that combines professional accounting with academic accounting. To further their understanding of accounting, Nigerian accountants should endeavour to balance the relationship between these two aspects of accounting.

History Of Accounting In Nigeria

History Of Accounting In Nigeria

Nigeria is a developing country and as discussed earlier in this article, accounting is one of the vital professions in any nation –whether developed or developing. In reality, Nigeria has produced a significant number of professional accountants who have played key roles at both local and international levels. However, the economic classification of Nigeria as a developing nation means the country needs to further consolidate the concept of accounting education. To reach high standards in the field of accounting, Nigeria needs to encourage its accountants – including chartered accountants – to dwell extensively on accounting education which can help them in the acquisition of globally recognized accounting expertise.

History of Professional Accounting Bodies in Nigeria

Professional accounting bodies are regarded as certified associations formed by high-minded and reputable persons. In that case, they are empowered by law to execute professional activities such as serving regulatory purposes, providing accountants with advanced training and creating an accounting environment that matches international accounting standards.

Sadly, Nigeria had no professional accounting body during the era of British colonialism but few years after the country gained independence from British colonialists, a number of accountants deliberated on the creation of a professional accounting body. Thereupon, these accountants played significant roles in the creation of “The Association of Accountants in Nigeria”. The Association laid down objectives which guided its activities. The objectives included:

  • Maintenance of rigid ethics and professional standards
  • Provision of a central body aimed at uniting Nigerian accountants
  • Provision of qualifications, academic training, and examinations to students of accountancy

However, the aforementioned association couldn’t serve the purpose of a professional accounting body until Chief Akintola Williams, in 1965, contributed significantly in setting up ICAN (Institute of Chartered Accountants of Nigeria) as the first professional accounting body in Nigeria. Meanwhile, the establishment of the accounting body [ICAN] came under the provisions of Act of Parliament No. 15 of 1965. As a regulatory accounting body, ICAN maintains the right to:

  • Establish and manage the records of associates, colleagues and registered accountants who are eligible to serve as auditors and accountants. As conferred on it by the aforementioned Act, the body [ICAN] is responsible for publishing a list of those persons on a regular basis
  • Set the criteria (particularly the levels of knowledge, skill, and expertise) which must have been met by anyone seeking membership into the profession of accountancy. Also, the body [ICAN] maintains the right to modify or elevate these criteria on a timely basis as conditions may demand
  • Carry out all other responsibilities vested in it by the Act. Meanwhile, the body [ICAN] fulfills this purpose through the Council of the Institute

Since its establishment, ICAN has played key roles which distinguish it as a reputable professional accounting body. Regarded as Nigeria’s first professional accounting body, ICAN inaugurated the establishment of ABWA (Association of Accounting Bodies in West Africa) in 1982. Meanwhile, ICAN has played a significant role in making ABWA an operative organization. Admittedly, ICAN is a vital body and besides its professional status, many of its members render accounting services in both public and private sectors.

ICAN, which had just 250 members at the point of establishment, has succeeded in developing tremendously with a large number of members. Today, the body comprises over 35,000 certified chartered accountants. Prior to the establishment of ANAN (Association of National Accountants of Nigeria) on 1st of January 1979, ICAN served as the sole organization regulating the profession of accountancy in Nigeria. By virtue of its formation, ANAN came as the second Nigerian organization aimed at serving regulatory purposes typical of the ones performed by ICAN.

In Nigeria, ANAN maintains a distinguished status as the only chartered professional accounting association legalized to provide all its students with academic teaching and examination. Above that, it serves as the only association vested with the authority to advance the science of accountancy.

Although the formation of ANAN came about on January 1, 1979, the association wasn’t incorporated until 28th of September 1983. On August 25, 1993, it eventually became a chartered association in accordance with the provisions of Decree 76 of 1993.

Today, ANAN has maintained its grounds as a certified national accounting organization that educates and trains students through its qualitative academic programmes. By virtue of this function, ANAN portrays the national sphere that would match accounting standards that suit the international level.

ANAN was formed through the collective ideas of some level-headed Nigerians who had the objective of establishing a professional and locally-grown accounting body. Meanwhile, it has adopted a community-oriented and ultra-Nigerian approach in outlining accounting practices and standards. In its vision, ANAN reflects the desire to become a “Premium Brand of Choice’’ in the practice of professional accounting in Nigeria. It also reflects the desire to influence the complex and thorough practice of accounting education.

Over the years, ANAN has striven tremendously to improve the science of accountancy in Nigeria. Likewise, the body [ANAN] has gathered significant efforts in introducing multi-disciplinary value to help churn out level-headed, sophisticated and well-trained professionals who show acceptable conduct, expert practice and intense knowledge. Significantly, the formation of ANAN has encouraged the establishment of several other professional accounting bodies in Nigeria.

That’s all about History Of Accounting In Nigeria Since Independence.

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