…the Financial Reporting Council ought to be consulted when drafting the provision of the Finance Act pertaining to such statement that the FIRS may prescribe the form of accounts other than audited financial statements for small and medium companies, to avoid the fallacies, ambiguities and controversies I have raised…
As such, which entity is an SME when it comes to FIRS’s prescription on the form of accounts, other than audited financial statements, for small and medium companies? Should FIRS prescribe the same form for both small and medium companies, given that their turnovers differ? That is the first controversy.
Another fallacy and ambiguity is in creating the impression that the FIRS has the power to overrule accounting standards usually adopted in preparing and presenting financial statements by prescribing a form or format of accounts other than audited financial statements for SMEs. This is not correct as FIRS has no such power and cannot invent another form or format of accounts.
I will therefore advise that in future, the Financial Reporting Council ought to be consulted when drafting the provision of the Finance Act pertaining to such statement that the FIRS may prescribe the form of accounts other than audited financial statements for small and medium companies, to avoid the fallacies, ambiguities and controversies I have raised above.