FRC To Train MSMEs On Accounting Principles

The Financial Reporting Council of Nigeria (FRC) has said it plans to train between 35 and 50 per cent of Micro, Small and Medium enterprises (MSMEs) on developing an accounting system that would enable them to plan and grow.

Speaking at a train-the-trainers session organised by the FRC and the United Nations Conference on Trade and Development (UNCTAD), executive secretary of the council, Dr Rabiu Olowo, stressed the importance of accounting to the growth of businesses which contribute to development of the country.

Olowo who was represented by the Coordinating Director, Accounting Standards Sustainability, FRC, Dr Iheanhyi Anyahara, stressing the importance of MSMEs in development of any nation said many lack the basic accounting principles that would aid their sustainability.

“Financial Reporting is critical for planning, and most of the MSMEs do not have a single record of their financial transactions.

This inhibits their planning processes, and therefore we believe educating them will help them grow.

“We recognise the importance of micro, small, medium enterprises, and we collaborated with the UNCTD, the expert Working Group on International standards on accounting and reporting, to gather a crop of professionals to equip them and give them a model to train MSMEs in the area of financial reporting. We cannot reach all of them as we have over 41 million MSMEs.

“So, we decided to bring together professional accountants to inform them and guide them on how to train the MSMEs. Training all the MSMEs is a daunting task. So, we would want to reach as many as we can. We have a target of reaching between 35 and 50 per cent of MSMEs next year. Financial reporting is very fluid and dynamic. A lot of developments come where the standards are revised or changed in that circumstance. We keep updating the MSMEs on how to effectively report,” he pointed out.

Noting that the training is part of the SDG goal of 2030, he said, there is a need to get businesses irrespective of size to account and disclose what they are doing. “What is not measured cannot be reported. That is why we really want to start training in 2025 so that is why we are striving to conclude the training of the trainers.

To him, “Most times we are without the micro and look at only small and medium. However, the micro is even in greater numbers than the SMEs. With technology, a trader can use his or her phone to articulate how much he or she has sold, how much he or she has purchased and how much has been made. Most of them don’t have this. And that is what we are trying to inculcate into all of them.”