Alhaji Isma’ila Muhammadu Zakari is the 53rd President of the Institute of Chartered Accountants of Nigeria (ICAN) and chairman, ICAN Governing Council. Despite occupying the exalted position as the number one chartered accountant in Nigeria, Zakari exudes humility and maintains a calm demeanour. Though a man of unassuming disposition, he left no one in doubt that he was cut out for the leadership position. Little wonder Zakari, who has been a member of the governing council since 2004, has also served on several ICAN committees. For instance, he was the chairman, Professional Examinations Committee and also deputy chairman, insolvency and corporate re-engineering faculty. A fellow of ICAN, Zakari is also a fellow of Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) where he serves as council member. He is currently the Managing Partner of Ahmed Zakari & Co. (Chartered Accountants), a firm he co-founded in 1998, providing auditing & assurance, tax advisory, insolvency and business consulting and business valuation services to a wide range of clients in Nigeria. Zakari, in this interview with Kunle Aderinokun, reviews the anti-corruption fight of the President Muhammadu Buhari administration and assesses the recently launched Voluntary Asset and Income Declaration Scheme (VAIDS). Besides, he expressed his view on the Financial Reporting Council’s decision on the tenure for heads of non-profit organisations as he reveals the institute’s plans under his leadership.
As the new president of Institute of Chartered Accountants, what do you want to do differently from the other presidents?
As the President of Institute of Chartered Accountants for 2017/2018, I am not actually doing anything different from what other ICAN presidents have done. I am the number one chartered accountant today and chairman of the governing council of the institute. So, my responsibility is to lead the council and the council’s responsibility is to govern the institute and the accounting profession in Nigeria. That is what we are going to do. But specifically in what areas are we planning to intervene? It is to continue with the work that other presidents have done over the 53 years of the existence of this institute. Presidents don’t just come and change the direction where the institute is going, but rather continue from where the immediate past president stopped. So we are going to continue to imbibe professionalism and high quality standards of operation by all chartered accountants in Nigeria by ensuring the continuous adoption of international standards in every aspect of where we work like in audit, accounting, public sector, accounting education and because we are members of international federation of accountants, one of the requirements of maintaining our membership is that we should comply with the provisions of those standards and we shall continue to do that.
Other areas that we are going to work with is to strengthen the quality of the work that our members do, give them support including how to manage their practices especially small and medium practitioners. Right now, they are the face of the profession all over the place, chartered accounting firms and if we want to improve the standards and quality of the profession, we have to work on that.
We are going to service our members and improve the quality of services that are our members are getting from us as an institute and also improve the quality of services to students to support them on how to become chartered accountants because that is our responsibility. Other area that we want to improve is to come up with accountability index because accountability in Nigeria is a major issue. We want to support the government in curbing the issue of corruption and also improve accountability especially in public sector financial reporting. In that regard, ICAN intends to come up with ICAN Accountability Index, which will become an annual kind of rating of the best in terms of compliance with constitutional requirements for accountability in governance. We are going to make sure that index will be able to rank public sector institutions as to how they are doing. At the end of the day, the aim is to improve on the quality of accountability and the timeliness with which it is delivered.
Another area which is part of our public interest mandates is to support the government in curbing what we considered one of the most serious problems government is facing today, which is youth unemployment. We want to use our influence to put together like-minded stakeholders to support the government to come up with some solutions on how to curb unemployment problem.
What is ICAN’s relationship with Financial Reporting Council of Nigeria?
Our relationship is a very cordial one and I want to say it is reciprocal. They have the mandate to regulate financial reporting in Nigeria. We have the mandate to regulate profession of accounting, which goes beyond financial reporting. We have two seats on the board. The council nominates, who will serve on those seats, representing Institute of Chartered Accountants of Nigeria. Also, our members fall within the ambit of regulation of the Financial Reporting Council of Nigeria. It means we are under Financial Reporting Council of Nigeria in terms of making sure that the regulation is okay.
Why I asked the question is because in your acceptance speech, you talked about having succession plan for small and medium-scale enterprises, which means setting tenure for chief executives of these companies. This, we know, is in the purview of FRC. Why are you trying to do what FRC is doing?
I think you did not understand what I meant by succession plan. We are not setting any tenure. You know also that companies are created under the Companies and Allied Matters Act and this has made provisions for ownership of the companies. If you want to create a company, you are a shareholder and if you no longer exist, you pass on or you want to leave the company, you can sell your shares. So, what we are talking about succession plan is that a company that is operating and successful should not die just because the owner has died or left the company. We want to be able to support companies. If you look at what is happening outside, there was intervention by the Securities and Exchange Commission in respect of Sheraton Hotels, Ikeja. That is what we are talking about. Sheraton Hotels, Ikeja was doing well, there was no problem until somebody died, and suddenly after somebody died, there was a board crisis. What we are saying is that we will support, encourage, give ideas and encourage companies that are existing and successful. We are not setting any tenure for them.
Let’s look at your members’ compliance with laws and regulations. Talking about the global whistle-blowing standards, how many of your members have been found wanting?
The truth is that I talked about this standard, which is a pronouncement called non-compliance with laws and regulations. It has not yet taken effect. It is a new pronouncement. What I am saying is that, we are aware of that new pronouncement and under my leadership, the council will look into that pronouncement and adopt it. We have already adopted it at the last council meeting held on the 29th of June. And what that new pronouncement is saying is that with effect from the effective date of the implementation of that pronouncement because the pronouncement is an amendment to the accountants’ ethical code under which we operate as professional accountants, we must comply with code of professional ethics and guidelines for members in Institute of Chartered Accountants. If we don’t comply with it, it is considered to be a case of professional misconduct. With effect from 15th of July 2017, we are required to comply with this new pronouncement and what that means is that previously, one key principle of our accountancy ethic has been confidentiality, meaning that you cannot come here as a journalist and ask me some information about my client and for me to relay that information to you. The profession does not allow me to convey my client’s information to any third party unless there is a subpoena by the court. Even if a police come to ask me that, I cannot do that. Now, the profession itself has gone forward to change that principle to say that in the event that we come across either as chartered accountant or auditor or as employee of a company, come across a case of non compliance with a law or regulation of the land and such a person is now expected to breach the confidentiality rule, first bring it up with those concerned with governance in the company. If I am an auditor, I will bring it up with the management of the company, board of the company, audit committee of the company. Not only will I bring it up, I will also proffer solution of how to remedy that non-compliance situation. If they don’t accept it, the ethical codes now require me to report to the regulator or law enforcement agents. So, from 15th of July, accountants all over, either in practice or employment have a duty to comply with that NOCLAR requirement. We have adopted it already and we are now in the process of publicising it across members and developing appropriate training to our members whether in practice or employment on how to handle those situations. In addition, there could be risk associated with complying with that standards and that is, there could be some harassment or threats to the members or they can even sack him from his employment. We have a whistle blower fund, which has been in place since 2014, we will release it to support our members and fight for their rights.
Back to FRC. Sometimes ago, there was an issue about tenure of chief executives for non-profit organisations, which affected religious bodies. From what we learnt, the executive secretary overreached his mandate and acted unilaterally. Was ICAN in the know of what he did? Secondly, is he an ICAN member? If yes, what has been done to him after his sack?
You are talking about the corporate governance code. First of all, one of the mandates of the Financial Reporting Council is to come up with corporate governance code for the entities that they regulate and they came up with three corporate governance codes. One is for listed companies, the other one is for other companies and one is for non-profit organisation where we have the church, mosques, religious bodies and other charities. I think for me, what the FRC did was not in breach of any law or regulation. They just acted to the effect that they have a mandate under their law to come up with corporate governance code and non-profit making organisations are under their mandate and so, they have the right to produce a code of corporate governance for them. Corporate governance code for us in Institute of Chartered Accountants is important to the functioning of the economy. We are interested in corporate governance at all levels because the higher the corporate governance, the better the management of those organisations and their sustainability.
My understanding is that there were some complaints about the content of the provisions of the code for non-profit organisations by some stakeholders and they had complained and my understanding also is that, as at the time that matter was on, there was no board. The president had dissolved the board. It was the executive secretary that was running the board of FRC under the directives of the minister. I don’t think that his sack has to do with any misconduct of professionalism but it may have something to do with misconduct about his employment and with regards to the directives not complying with the directives of the minister, of the ministry or the government who are his employers. I think that is where the problem is. So, we have not received a report. If there is a case of professional misconduct, what are we expected to do? The minister of trade and investment is also a chartered accountant, what we expect is that he can report to the institute but we cannot act without any report detailing the professional misconduct that the man has committed.
Kindly review the anti-corruption fight of the President Muhammadu Buhari administration. In answering the question, I will like to know your view on the government’s whistle-blowing initiative.
On anti-corruption, we are fully in support of the government’s efforts towards curbing corruption in Nigeria. No economy can survive with corruption and therefore, whatever the government is doing, we as Institute of Chartered Accountants of Nigeria are in support and agreement with what they are doing. What we will say is that a lot of these things need to be publicised. For example, some of the money laundering laws, the threshold of some of the issues about money laundering or how much cash that can be handled under the law. Right now, in an informal economy such as Nigeria, it is money that is moving around in the hands of people. If I have more than N500,000 at hand, I am involved in money laundering. So what I am saying is that pay into bank. I think it is very important to publicise that law and not just assume that ignorance of the law is not an excuse. A lot of Nigerians need to know what it is but in terms of fighting corruption, we are in support of government. However, they are chasing what has already passed, but right now, we need to strengthen controls around the system; we need to do more institutional work towards plugging the holes in the system than the post mortem. The whistle blower is working, but it appears they dwell more on what has happened and not what will likely to happen. I think we need to scuttle the plans of some people in relation to corruption before they happen, nip it in the bud before it happens. That is the addition that we need to work on.
The government should work on Whistle Blowing Act such that if they are encouraging whistle blowing, they should also provide solid protection to whistle blowers including physical protection. In other climes, where people blow whistle, serious physical protection are giving to them and I don’t see the government working towards that direction. It is only our governors that are more protected than the ordinary citizens, who are not given the kind of protection I think they should be given.
Recently, the Acting President Yemi Osinbajo signed an executive order on Voluntary Asset and Income Declaration Scheme (VAIDS), which was launched some days later by the government. What is your take on it?
The Acting President Yemi Osinbajo signed an executive order, which is encouraging citizens of Nigeria who are required and mandated by the constitution to pay their taxes and this voluntary initiative is that citizens, in the past, who have not been complying with all relevant tax laws should come forward and declare themselves and pay taxes and for that, the government is giving them some waivers, they can split and pay the taxes they have come to declare over a period of three years, the government is not going to prosecute you and so on. I think it is a very brilliant idea. The Institute of Chartered Accountants of Nigeria is in support of this, ICAN will be speaking to the public and our members will be encouraging everybody to comply with the tax laws. Right now, taxation is the source of revenue that the government needs to be able to govern the country. Government cannot control oil revenue. This is encouraging those who are previously not in the tax net to come forward or those who have previously paid less tax than they should pay to come forward and pay the balance. If it is implemented, I believe it is for the better of Nigeria and Nigerians.