The board plays a critical role in the financial prudence of the company through its oversight functions.

1. CORPORATE
GOVERNANCE FOR
COMPANIES
BY
PROF. ADESOJI
ADESUGBA, DBA
Finanacial oversight of the Board

2. Internal control
•
This is the whole system of control financial or otherwise set up by management to
ensure that:
• the business of the company is run in an orderly and efficient manner
• to safeguard company’s assets
• to prevent and detect fraud and error
• ensure the accuracy and completeness of accounting records
• ensure timely preparation of reliable financial information
categories of internal controls: Financial, Operational and Compliance control

3. Internal control Contd..
Provision for Internal Controls under SEC Rules:
123. (1) A custodian of securities shall have adequate internal control measures to prevent any manipulation of records
and documents, including audits for securities and rights or entitlements arising from the securities held by it on behalf
of its client.
(2) A custodian of securities shall have appropriate safekeeping measures to ensure that such securities are protected
from theft and other hazards.
124. Monitoring, review, evaluation and inspection of systems and controls:
(1) A custodian of securities shall have adequate mechanisms for the purposes of reviewing, monitoring and evaluating
the custodian's internal controls.
(2) The custodian of securities shall cause to be inspected annually the mechanism referred to in (1) above, by an
expert, and forward the report to the Commission within three months from the date of inspection.
(3) An expert for the purpose of this sub-rule is an independent person with requisite skills and knowledge and who is
recognized by the Commission.

4. FINANCIAL STATEMENTS
• In Line With CAMA,
According to Section 334 (1) of the Company and Allied Matter Act (CAMA, 2004), the company
directors are to prepare the financial statements of its entity while sub-section (2) identified ten
financial statements to prepared by the entity. These include the following;
1. Statement of the accounting policies;
2. The balance sheet as at the last day of the year;
3. A profit and loss account or, in the case of a company not
trading for profit, an income and expenditure account for the
year;

5. Financial Statements Contd..
• 4. Note on the accounts;
5. The auditors' reports;
6. The directors' report;
7. A statement of the source and application of fund
8. A value added statement for the year;
9. A five-year financial summary; and
10. In the case of a holding company, the group financial
statements.

6. Financial Statements Contd..
• In Line With International Financial Reporting Standard (IFRS)
Under IFRS, the standard that discuss about the financial statement to be presented
by an entity is IAS 1 “Presentation of Financial Statement”. IAS 1 identified six
financial statements that must be presented by an entity which include the following;
• 1. A statement of financial position
2. A statement of profit or loss and other comprehensive income
3. A separate statement of changes in equity
4. A statement of cash flow
5. Significant accounting policies and explanatory notes
6. A statement of financial position as at the beginning of the
earliest comparative period.

7. • EFFECT OF INTEGRATING IAS 1 INTO THE SECTION
334 (2) OF CAMA 2004
As highlighted above, the list of financial statements identified by IAS 1 still fall under those
listed by CAMA but with little modification and change of name. The areas where there are
modifications are clarified below;
I. Balance sheet under CAMA is identified as Statement of
Financial Position by IFRS
II. Profit and loss account under CAMA is identified as Statement of Profit or Loss and Other
Comprehensive Income
Those are the two major areas of changes in name of the financial statements

8. Role of the Audit Committee:
• Rule 30, Code of Corporate Governance
• i. To monitor the integrity of the company’s financial statements and any formal
arrangement relating to the company’s financial performance.
•
ii. To make recommendations to the board in relation to the appointment, re-appointment
or removal of company’s external auditor for putting to the shareholders for approval.
•
iii. To approve the remuneration and terms of engagement of external auditors after
negotiation.
•
iiii. To review and monitor the independence and objectivity of the external auditors and
also the effectiveness of the audit process.
v. To develop and implement the company’s policy on using the external auditors to provide
non-audit services.