A leading global financial and consultancy firm, KPMG Professional Services, has urged shareholders to monitor companies account in other to ensure good corporate governance.
Speaking at 2017 KPMG Shareholders Audit Committee Seminar for Nigerian Shareholders’ Solidarity Association (NSSA) in Lagos at the weekend, Partner and Head, Audit Services, KPMG Professional Services, Tola Adeyemi, stated that the reason for seminar is to equip members of the audit committees with information regarding current happenings in the economy and how they impact in the performance of companies in Nigeria. Audit Committee members of every publicly quoted company are representing the shareholders and must monitor how decision affecting resource allocation are taken.
“Every year we organise seminar for shareholders particularly shareholders representatives of audit committees of public companies in Nigeria. This particular seminar is targeted at those shareholders representatives of audit committees who belong to the NSSA. The reason for this year’s seminar is to equip members of the audit committees with information regarding current happenings in the economy and how they impact in the performance of companies in Nigeria.
“The seminar is to make members of the NSSA aware of their responsibilities as members of audit committees. KPMG as a body feels the more effective audit committees are, the better the corporate governance that would be seen within the coparate entities in Nigeria,” he said.
The Audit Director, Audit Services, KPMG Professional Services, Robert Araeb, opined that members of audit committee should know what is the company’s share of the market, how does this compare to prior years, how does the company plan to increase its market share and if there is business continuity plans in place in case a major supplier ceases business.
Furthermore, he urged shareholders to know “what initiatives has the company taken to maintain or strengthen its competitive position in the wake of increasing global competition. Are there any business restructuring plans? If so, why? What potential benefits will this have? And what are the expectations for the company’s future growth.”
He stressed that shareholders should knew henceforth that IFRS 9 applies for all companies and that shareholders should the management team accountable.
According to him, “IFRS 9 brings big changes to the classification and impairment of financial assets. It introduces a new hedge accounting model and extensive new disclosure requirements. IFRS 15 introduces a five step model to determine when to recognise revenue and at what amount. IFRS 16 will require companies to bring most leases on-balance sheet.”
On his part, Kabir Okunola, Partner, Audit Services, KPMG Professional Services, emphasized the impacts of foreign exchange policy on business operations and highlighted what shareholders should look for in the company’s accounts.
According to him, “sharp drop in crude oil price was consistent with the significant drop in foreign reserves and ultimately the Nigeria Stock Exchange All-Share Index (ASI). Foreign reserves dropped from $34.5billion in December 18, 2016 to $27.9billion in January 21, 2017.
“Similarly, ASI dropped from 41,329.19 basis points in January 18 to 26,036.24 basis points in February 21, 2017.”
Besides, he harped on the fact that the entire industry, including the manufacturing, banking and oil and gas industries, suffered huge net foreign exchange loss due to unfriendly foreign exchange policy of the Central Bank of Nigeria (CBN).
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