The President of the Institute of Chartered Accountants of Nigeria, Innocent Okwuosa, speaks to OGHENOVO EGODO-MICHAEL about his career and plans for the institute
What inspired you to pursue a career in accountancy?
I heeded the advice of my uncle, who knew about accountancy.
What are the important qualities an accountant must possess to succeed?
Integrity is one of them. Accountants should be straightforward and honest in all their professional and business relationships. Objectivity is another important quality. An accountant should not allow bias, conflict of interest, or the undue influence of others to override their professional judgments.
Professional competence and due care can also not be left out. To remain relevant, an accountant must maintain professional knowledge and skills at the level required to ensure that clients or employers receive professional services based on current development in practice, legislation, and techniques.
Accountants are encouraged to act diligently and in accordance with applicable technical and professional standards when providing professional services.
Confidentiality is another important quality. An accountant respects the confidentiality of information acquired in the course of professional and business relationships, and does not disclose such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose.
Also, an accountant must comply with relevant laws and regulations, and avoid any action that would discredit the profession.
All that I listed are known as the fundamental principles of ethics for professional accountants. Members of the Institute of Chartered Accountants of Nigeria are expected to comply with those guidelines; otherwise, they would face ICAN’s disciplinary process.
As a member of the International Federation of Accountants’ International Panel on Accounting Education, do you think the Nigerian educational system is grooming accountants who meet international standards?
The Nigerian educational system, though impoverished, is doing relatively well with respect to grooming accountants who meet international standards. Also, ICAN has contributed immensely to improving the quality of the accounting syllabi at various levels, including secondary and tertiary. About two years ago, the institute reviewed the syllabi of the Joint Matriculations Examinations Board, West African Examinations Council, National Examinations Council, and the National Board for Technical Education, as well as the Accounting degree programmes of the National Universities Commission. We then presented to each relevant body what ICAN felt should be covered. In doing this, the ICAN team, which I chaired, drew from IPAE’s International Education Standard. The cost of those projects was borne entirely by the institute in the spirit of its public interest mandate. When NUC embarked on its last review of the accounting degree syllabus, I was appointed as a member of the committee, and we also reflected on the IES content and ICAN curriculum.
However, the curriculum can be better, because accounting operates in an ever constantly changing and dynamic environment. For example, sustainability standards have emerged this year. That ought to be incorporated in the accounting degree curriculum, but were not there at the time we were working on it.
Aside from the syllabus review, ICAN also conducts accreditation and monitoring of accounting degree programmes of some tertiary institutions that seek exemption from some subjects in its professional exams. Let me use this opportunity to distinguish between NUC/NBTE accreditation and ICAN accreditation.
NUC/NBTE is the regulator and sets the minimum benchmark that each tertiary institution must meet, and ICAN supports that. But, ICAN’s accreditation is because ICAN will grant exemptions to holders of such tertiary institutions’ certificates. As such, the council of the institute sets a minimum standard that must be met by such institutions in order to enjoy the exemption from such subjects. These are usually benchmarked against international standards. So overall at the tertiary level, the ICAN accreditation process ensures that the Nigerian education system grooms accountants who meet international standards.
Moreover, our students excel in international examinations, and we interpret that as evidence, which shows that quality is not totally deficient. That being said, there is a need to improve the funding of the education sector. Presently, the federal allocation for education in Nigeria is one of the lowest in Africa, compared to countries such as Ghana, South Africa, and even Mali. Boosting the levels to recommended best standards will significantly improve the quality of accounting education across all levels.
With your experience in teaching, and your stint as an associate professor of Accounting at a Nigerian university, are there similarities between practising accounting and teaching it?
My answer is an emphatic no, drawing my knowledge from both practice and teaching. Teaching is more about educating a person, and showing them how to engage in accounting practice.
Practice, on the other hand, is the actual execution of what was learnt, and translating it into action. Some look at teaching as connoting theoretical exposition, but there is also practical teaching. There is teaching or learning on the job as well. The distinction is that he who learns must then do it, and it is in doing that practice can be situated. Practice enhances teaching as the lecturer who has practiced draws from practical experience to teach.
How do you stay up to date with the latest developments in accounting and finance?
I stay up to date through the various professional and academic communities that I belong to. I am a member of the International Federation of Accountants, a board member of the Pan Africa Federation of Accountants, and the Association of Accountancy Bodies of West Africa. I also belong to academic research groups, such as the British Accounting and Finance Association, and African Accounting and Finance Association. I also attend international conferences of topmost accounting journals such as Accounting, Auditing and Accountability Journal; and Critical Perspective on Accounting. I am also involved in accounting research, and I engage in literature review, which exposes me to current topical issues in accounting.
ICAN had plans to establish a university some years back. How is that going?
The plan to establish a university is on track. The process for establishing a university requires the approval of the National Universities Commission. The NUC has about 11 requirements that a private university (which is where we belong) must meet; and we have met some of those requirements. So, at this point, I will say we are on course.
What advice do you have for the current administration as regards checkmating the country’s rising debts amidst more borrowing?
Nigeria’s debt status resulted from deficit budgets culminating from years of dependence on crude oil revenue; a resource that has been affected by theft, international price volatility, and poor management, among other factors. The country resorted to borrowing to offset its public finance in 2015, following a decline in the country’s oil revenue.
The advice I have that would help the government in checkmating rising debts and borrowing include ending security challenges facing the nation. Also, an enabling business environment should be created by improving the ease of doing business, vis-a-vis regulatory simplification, fixing infrastructure, and improved electricity supply. Urgent steps must also be taken to transform the country’s economy into a production-based one, by patronising locally produced goods and services, and encouraging all Nigerians to do the same. The government should also incentivise the growth of the non-oil sector of the economy, continue to diversify, and end oil theft.
I will also emphasise one aspect, which people often neglect, and that is to enthrone accountability and transparency in all aspects of public governance.
Accountability and transparency in government have the potential to checkmate rising debts and borrowing, as they strike at the root of corruption. I posit that unaccountability breeds systemic corruption, which leads to borrowed public funds ending up in private pockets, and necessitating the need for the government to borrow again, thereby increasing the debt burden. That is why I always advocate for the employment of more chartered accountants. That is also why, within ICAN, we advocate for accountability and transparency in governance through the ICAN Accountability Index. Embedding the pillars of ICAN AI can help the federal and state governments in checkmating rising debt. This government should partner with ICAN, because we know what to do.
What are some measures the government can employ to remove Nigeria from among the poorest countries in the world?
Basic economics teaches that gainful employment is an antidote to poverty. People are poor because they do not have the means of earning an income and making a living. The surest way the government can remove Nigeria from among the poor countries in the world is to create employment for all. I am not saying the government should employ all. But, they should employ those they can, and create an enabling environment for the private sector to boom and create more of such employment.
In Nigeria, the Federal Government employs about 720,000 people, but Walmart (a company in the United States of America) has about 2.3 million employees, while Amazon (another company in the US) has about 1.6 million employees. I understand that the Dangote Group (a company in Nigeria) has about 33,000 employees.
Creating employment entails attending to the issues I raised earlier.
What are the common mistakes people make when it comes to spending and budgeting?
The mistake I see here is spending without budgeting. A budget is a plan that shows one’s expected income and expenses. What that immediately tells one is that if one wants to spend more, one has to earn more. If one earns less, one would have to spend less. That is the difference between an accountant and an economist. An economist can advise the government or individuals to spend more than their income by borrowing (deficit finance) to stimulate economic growth.
On the other hand, the accountant helps in budgeting, so one sees the deficit, but will not advise one to spend more than one earns.
The new government removed petroleum subsidy because according to them, it only benefitted the rich. In what ways can the government judiciously use funds saved in the process?
One of the best ways the government can use the funds is by providing credible palliatives, that are designed to reach low-income earners in cities and towns, where the impact of the subsidy removal is high, especially for transportation and the cost of living.
Also, the savings from subsidy can be used to rectify the imbalance in education funding, improve the nation’s primary healthcare system, address security challenges facing the country, and transform the economy from consumption to production. Of utmost importance is addressing the infrastructural decay in the country. The savings can be channeled into improving transportation and road networks, and funding energy/power projects in the country. I support the government’s energy transition to gas, but why are oil companies still flaring gas? The subsidy savings could be channeled to develop gas infrastructure that will make oil companies stop gas flaring. They can also be used in developing other resources that can help diversify the economy?
As a former chairman of ICAN’s syllabus review committee, what is your assessment of the institute’s syllabus?
The institute’s syllabus is a very important aspect of our examination process. Previously, ICAN’s syllabus used to be reviewed every five years, but it later became every three years. Now, it is reviewed every year. That is because of the fast-paced dynamic environment in which accounting operates. Even within the local environment, amending the Finance Act is an annual event. ICAN’s syllabus now changes like a chameleon to reflect the dynamic environment. However, it should be noted that new topics are tested six months after their introduction into the syllabus.
You initiated the current Mutual Cooperation Agreement with Tertiary Institutions. What does that entail?
We set up the MCATI scheme− a model adapted from the Institute of Chartered Accountants in England and Wales− to deepen cooperation between the institute and select tertiary institutions to improve the quality of accounting education in Nigeria. Students that graduate from these MCATI-accredited institutions enjoy expanded exemptions from 10 subjects of the institute’s professional examinations. The graduates write only the five subjects at the final level of the institute’s professional examinations. This year, we hope to restructure the MCATI and adopt the model in ICAEW, which informed its introduction into ICAN in the first place. It will be a tripartite arrangement, involving a university, an employer (usually a ‘big four’ or medium firm), and the institute. We hope it will contribute to addressing the japa (brain drain) syndrome in Nigeria.
What are some of the strategies employed to keep the ICAN examination leak proof?
I will not let the cat out of the bag, as it is our strategic competitive advantage in the environment we operate. However, I will let you know that we have put stringent security protocols in place to protect the examination materials from unauthorised access, leaks and tampering. The measures that ensure it does not leak also include limiting the number of people involved in the critical aspect of the examination process, and a short time between the production of the questions, printing, and conducting the examination. In addition, the printing of the questions is done by a reputable organisation that has a name to protect. There are very strict internal controls throughout the examination process.
What were the highlights of your time as an honourary lecturer at the University of Liverpool?
I started that role when I newly arrived in the United Kingdom in 2005. I was considered for the position, because I was a chartered accountant. It was an online learning model that was adopted, and we had students from over 150 countries. It was far ahead of its time as digital facilities such as Zoom and Microsoft Team were not in existence then. We made use of a software called Embanet, and learning was facilitated through threads of discussion usually initiated by the instructor or the facilitator. The emphasis was on experiential learning through knowledge construction. Because most students were workers, knowledge was disseminated through discussion questions, which all students in the class engaged in. There were many Nigerians occupying top positions in the private and public sectors who took part in the programme. Back then, what Nigerians were known for were their complaints about the Internet not working. I guess things are better now. That programme was unique.
How do you think the post-COVID-19 pandemic work model will impact the accounting profession, and what changes do you anticipate in terms of work flexibility?
Even though we cannot describe COVID-19 pandemic in positive terms, it provided the impetus for rapid innovation and change across virtually all sectors, and the accounting profession was not left out. Although more flexible working conditions, such as working from home, had already been introduced in some climes before the pandemic, it took the spread of COVID-19 to turn it into a reality for organisations that never thought of embracing working remotely. Interestingly, carrying out tasks remotely produced the same result as the usual traditional model, with the added advantage of saving overhead costs and time. Also, the deployment of technology in accounting assignments were accelerated, such that repetitive jobs are no longer where the accountant’s skill is needed. Accountants now have to develop new skill sets to deal with areas of modern reporting, such as sustainability, business decisions requiring judgment and professional scepticism, relying on the work of experts, emotional intelligence, and teamwork. With the spirit of teamwork, one can execute professional practice assignments with members spread across the planet. While lecturing at the University of Reading, UK, I co-facilitated a module with co-lecturers in the UK, China, and Malaysia, all with different time zones, people, and cultures.
What strategies do you recommend for managing remote teams effectively, and how can businesses ensure that their accounting and finance functions remain efficient and productive in a flexible work environment?
For the two questions, my answer will be to set SMART key performance indicators for members of the team, and the accounting and finance functions. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound KPIs. By clear and regular communication of the team’s goals, objectives and responsibilities, employees understand the organisation’s expectations of them, even when working remotely. With the adoption of constant feedback, performance evaluations and recognition, and promptly addressing underperformance, employees will no doubt improve their performance and maintain high productivity, while working remotely and in a flexible work environment.
Also, I will recommend that employees are provided with the necessary tools and resources to be able to work remotely and in a flexible environment. This includes secure access to accounting software, communication tools, and provision for data. There should also be investment in reliable technology infrastructure, such as cloud-based accounting systems, to facilitate seamless remote work.
Furthermore, I strongly recommend that organisations provide continuous training and development opportunities to keep employees updated on accounting standards, financial regulations, and technology advancements. This will enhance their skills, and enable them to adapt to changing work environments more effectively.
What role does technology play in modern accounting practices?
Technology has revolutionised modern accounting practices and helped to automate routine and repetitive accounting tasks, such as data entry, bookkeeping, and processing of transactions. This automation has minimised errors, time spent on manual work and allowed accountants to focus on more value-added activities.
Also pivotal is the role of robust security measures, encryption techniques, and access control that technology offers in modern accounting practices. Technology plays a crucial role in ensuring data security and regulatory compliance.
Another role technology has played in accounting practices is the advent of cloud-based accounting systems. The system offers benefits such as remote accessibility, data security, automatic backups, and scalability, and with it, accountants and clients can access financial data from anywhere, collaborate in real time, and easily share information. Mobile accounting apps have also helped to manage financial tasks while on the move.
What do you consider to be the biggest challenge facing the accounting profession today?
One of the biggest challenges facing the accounting profession is adapting to new technology and staying up to date with developments in the business environment. These developments may emanate from societal demands such as environmental, social and governance issues, government policies, regulatory changes, and new accounting standards. We live in a rapidly changing and dynamic world that continuously throws up new challenges in the accounting profession. That is why the narrative at the IFAC level now is ‘accountants doing different things differently’ and ‘future-ready accountants’. An example is the change brought about by Artificial Intelligence, big data, cloud computing and different skills required to deal with sustainability reporting and assurance, as well as ethics around technological innovations.
Within the Nigerian environment, ICAN, as a professional accountancy organisation, is facing local pressures that seek to diminish its areas of professional practice in which it was originally licensed to engage in. That is a big challenge. The danger is that this may end up diminishing the ICAN brand and affecting the mutual recognition arrangement ICAN has with top international PAOs, such as the Institute of Chartered Accountants in England and Wales and the new ones in the pipeline with Chartered Professional Accountants, Canada among others. ICAN is a founding member of IFAC and PAFA, and is well respected within global PAOs. Local politics should not be allowed to diminish it. We are happy that lawmakers now understand this, and we commend them for that.
What are some of the major goals you hope to achieve as ICAN president?
There are many goals we intend to achieve. My acceptance speech contains some of them. The theme of this presidential year is ‘ICAN on a New Upward Trajectory’. One of the goals is visibility. We will improve our visibility and will not volunteer silence in the face of seeming threats to our economic survival as a nation. Our voice will be more audible and clear in its intensity, depth and breadth.
Advocacy is another goal. We will pursue our public interest mandate with greater vigour and determination. We will advocate and promote accountability, transparency, and good governance within public and private institutions, given our belief in the building of strong institutions. One of the advocacy areas is the ICAN-Accountability Index. So far, we have published four editions of the report.
This focuses on public sector accountability, corporate reporting awards, which is a new initiative in collaboration with the NGX Regulation Limited to recognise listed companies that excel in financial reporting, thereby promoting private sector accountability.
Another one of our goals is ‘thought leadership’. ICAN has made intelligent and professional contributions to the national discourse on budgeting, financial planning, and policy formulation. We will raise the bar this presidential year by making more significant contributions to relevant accounting, finance, and economic issues. A think tank of the institute will promote thought leadership and take charge of the production of the institute’s position papers on national issues.
We will also ensure that accountants are future-ready, given the impact of technology (AI, robotics, big data, cyber security, cloud architecture and infrastructure, fintechs, etc). This will involve revising the initial professional development curriculum, and continuous professional development training. ICAN will further deepen its knowledge sharing and collaboration with other international PA partners, such as the ICAEW and ACCA during this presidential year.
We want to improve stakeholders’ engagement as well. We will engage more meaningfully with the Financial Reporting Council, and other professional bodies.
Another aspect is professional accountancy practice and monitoring. The institute will work on promoting the ease of engaging in accounting practice and deepen the practice for its members. To this end, it will engage with the ‘Big Four’ for the benefit of SMEs and the Financial Reporting Council for the entire practice. We shall ensure effective collaboration with the Financial Reporting Council of Nigeria to facilitate smooth and continuous conduct of practice monitoring exercises without infringing on the statutory responsibilities of each party.
We also intend to revamp the examination process as we transition to online examination.
We would intensify the disciplinary proceedings to punish erring members and maintain professionalism in ICAN too.
Do you treat your personal finance the same way you treat that of a company?
Yes, I treat the company’s finances the same way I treat my personal finances. I know I labour to earn every naira and find it difficult to spend it anyhow. For example, I am entitled to fly business class but when the cost is too high, I fly economy class. I ask myself, ‘If it is my personal finances, will I fly business class at this cost’? And, once the answer is ‘no’, I act accordingly. Some people see it as being stingy but in accounting, we see it as prudence.
Many people believe that accountants are stingy with money. What is your opinion on that?
It is a misconception that Accountants are stingy with money. Accountants are trained to be prudent, meaning we are sensible, careful and farsighted.
Unfortunately, this concept is misinterpreted to be stinginess. Prudence is the exercise of caution and the adoption of a conservative approach. This means that accountants anticipate and recognise potential losses and expenses, but do not overstate potential gains or revenues. By adopting a conservative approach, prudence encourages accountants to err on the side of caution and present a more realistic prudent assessment of financial affairs. These qualities rub off on personal finances as well.
How do you spend your free time?
These days I rarely have free time, but if I ‘mistakenly’ have one, I like to read books on life. The life we live is too deep and I believe we do not know and should continue to learn through reading books of life as well as life experiences. As they say, experience is the best teacher.
How do you like to dress?
If I have a choice, I would go with my simple Niger Delta dress and cap, but sometimes, I am forced to dress in an European suit and tie, because according to them, ‘you are the ICAN President’.
How would you describe your childhood?
I was born into a poor background and had to struggle my way to where I am today. However, I qualified early as a chartered accountant, and that altered my childhood experience.
How did you meet your wife?
Heeding the advice of my late mum that I should marry from our town since we grew up outside it, I travelled to my town, Oguta, during one of those Christmas seasons and met my wife there. She also grew up in Port Harcourt (Rivers State).
Are any of your children also accountants?
None of them chose accounting, but my first daughter is currently studying Economics. I guess she will end up an accountant.
