COMPLIANCE GUIDE: FINANCIAL REPORTING COUNCIL ACT REQUIREMENTS FOR PUBLIC INTEREST ENTITIES (PIES)
Introduction
The Financial Reporting Council (FRC) Act of 2011, as amended in 2023, establishes a robust framework for financial reporting and corporate governance for Public Interest Entities (PIEs). The Act mandates PIEs to implement and maintain an internal control system over financial reporting (ICFR), ensuring reliability, transparency, and adherence to Generally Accepted Accounting Principles (GAAP).
Effective January 21, 2025, the Financial Reporting Council of Nigeria (FRC) has introduced the National Repository Portal (NRP) to enhance compliance and streamline the financial reporting process for PIEs. This guide provides a detailed overview of the compliance requirements imposed on PIEs under the amended Act.
Expanded Definition of Public Interest Entities (PIEs)
Prior to the 2023 Amendment Act, the FRC attempted to extend its regulatory oversight to private companies, which was challenged in court. In FHC/L/CS/1430/2012 Eko Hotels Limited v. FRCN (unreported), the Federal High Court ruled that the FRC could not extend its powers to regulate private companies that were outside its statutory purview. In that case, the FRCN argued that Eko Hotels Limited (EHL) must comply with the Act because it is regulated by the Nigerian Tourism Development Corporation (NTDC). However, EHL argued that it is not a PIE because the NTDC Act does not impose mandatory filing obligation on hotel operators. The Federal High Court agreed with EHL’s position.
The Amendment Act has now broadened the scope of PIE to include the following categories of private companies, which is not an exhaustive list:
- Non-listed regulated entities which includes, entities that are regulated by the following regulators:
- Central Bank of Nigeria;
- National Insurance Commission;
- National Pension Commission;
- Nigerian Upstream Regulatory Commission;
- Nigerian Midstream & Downstream Petroleum Authority;
- National Health Insurance Authority;
- Nigerian Communications Commission;
- National Broadcasting Commission;
- National Universities Commission;
- National Board of Technical Education;
- National Commission for Colleges of Education;
- Nigerian Electricity Regulatory Commission;
- Securities and Exchange Commission;
- Nigerian Civil Aviation Authority;
- National Agency for Food and Drug Administration and Control;
- National Automotive Design and Development Council;
- Nigeria Shippers Council;
- Nigeria Port Authority;
- Infrastructure Concession Regulatory Commission;
- Estate Surveyors and Valuers Registration Board of Nigeria; and
- Nigerian Tourism Development Corporation.
