An evaluation of the regulatory framework for the prevention of misstatement of financial statements in Nigeria

 Paul Aondona Angahar

Senior Lecturer / Deputy Dean, Department of Accounting, Faculty of Management Sciences, Benue State University, Makurdi. Nigeria.

E-Mail: angahar63@yahoo.co.uk: Tel: +234-706-801-0515

Accepted  20 February, 2012; Received 27 January 2012

Abstract

The paper seeks to describe the operations of the regulatory framework for the prevention of financial statement misstatement/manipulation in Nigeria, which is provided by the Securities and Exchange Commission (SEC) and to assess the extent of its effectiveness in preventing misstatement/manipulation of financial statements in financial reporting in Nigeria. The Descriptive method was employed for the study; data were collected through interviews and documentary evidence. Using descriptive statistics consisting of frequencies, a measure of central tendency, visual representations made up of the bar chart, pie chart, and time series plot, the data were analyzed. The findings of the study indicated that the SEC is effective to the extent of detecting a mean of 25 cases of financial statements misstatement/manipulation annually for the study period 2003 to 2010 and thus prevented or deterred them. The regulatory agency has however been reluctant in applying the full force of the law in the enforcement of accounting rules.

Keywords: Regulatory framework, Accounting rules, Misstatement, Manipulation, Financial Statements, Enforcement.