Title: Fraudulent Reporting in Nigeria: Management Liability for Corporate Financial Statements as an Antidote.
Abstract: Financial statements are prepared by the management of an enterprise and released to the various stakeholders who rely on them to assess the type of dealings they could have with the company. An accurate assessment of an enterprise could only be carried out if the financial statements are accurate. Recent events, particularly the sudden collapse of enterprises with very healthy financial statements, have indicated that some financial statements are not prepared in accordance with generally accepted accounting principles (GAAP) and accounting standards. In most jurisdictions, when an enterprise fails or when it is realized that published financial statements are not accurate, it is usually the auditors who are blamed. However, in the recent past, there has been an increasing realization that since management has the primary responsibility for the preparation and presentation of financial statements, most inaccuracies in financial statements could be as a result of their deliberate action or inaction. This paper therefore examines the issues involved in making management liable for corporate financial statements from the perspectives of both the management and the users of financial statements. It concluded that there was need to make management liable for corporate financial statements but within certain defined restrictions defined by statute. The paper recommends that apart from the Chief Executive Officer and the Chief Finance Officer, other Board members should be liable. In addition, the paper recommends that management liability for corporate financial statements should be applicable to all companies in Nigeria irrespective of size or quotation status. KEYWORDS: Management, liability. Financial statements, criminal liability, civil liability
Publication Year: 2013
Publication Date: 2013-01-01
Language: en
Type: article
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Cited By Count: 2
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