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FINANCIAL REPORTING AND ETHICSphysically challenged people. Another insists that the only obligations of acommercial company are to obey the laws of the land and earn profits for itsinvestors. Yet others are of the opinion that companies need to concernthemselves with charitable courses only.According to Elegido (1996), maximizing profits does not strictly imply workingtowards the generation of greater profits. What it means is making efforts tomake large profits and subordinating literally such considerations as socialwelfare and the environment. While it may be desirable to render communityservices, it is not mandatory and neither is it a priority. Friedman (1970), thefamous monetary economist, believes that a company’s one and onlyresponsibility is to maximise profits for its investors as long as it acts withinthe law. He is of the opinion that going beyond this objective is synonymouswith having “socially responsible executives” who have to act as “redistributorswho take other people’s money, that is, the shareholders, and spend it on whatthese executives themselves defined as general social interest, as if theywere some sort of self – appointed tax collectors.” Friedman contends that it isbetter for the executives of a business to stick to maximising profits, as theywill more appropriately and effectively be “led by an invisible hand” toenhance the comfort of the common man. Friedman supports charity andassisting the needy. He, however, does not support making available to theneedy what belongs to other people. What, in effect, Friedman is saying is thata company’s shareholders should be left to show generosity in the areas oftheir choice, at their own pace and measure.The idea of Friedman that nobody is tied to moral responsibilities which exceedthe law does not appear to be sound.Firstly, legal prescriptions, because of the difficulties with their enforcement,tend not to create room for implementation. For example, a father has thelegal duty to cater for his children. But he has moral obligations such as theprovision of affection and protection from all forms of cruelty, as well. Themoral duties are not matters of law, yet they have to be respected and honoured.Secondly, the peculiarity of the law is its slowness, especially in Nigeria, infinding a solution to an identified problem. There is some time lag before asuitable law is in place. Moreover in certain societies, the cost of justice isprohibitive.Thirdly, in some places, there are laws which are morally objectionable. Anexample is a law which is in existence and which has to do with religiousdiscrimination, in some parts of the world.In view of the reasons outlined above, it does not appear sound that all a personneeds to do is to keep to the tenets of the law and nothing more. There is theduty of care to one’s neighbour. The code of moral rules or responsibilitiesapplies to both natural persons or individuals as well as body corporates.218
CORPORATE GOVERNANCE11.6.1 The law is unambiguous on the issue that a body corporate’s assetsbelong to the company, rather than the shareholders. In case ofliquidation, for examples, Section 279(4) of the Companies and AlliedMatters Act, Cap. C20, Laws of the Federation of Nigeria (LFN) 2004,states that the directors should take into consideration the interests oftheir employees. This disposition assumes that a company can makedonations which have to be disclosed in the corporation’s annual reports.Most public companies in Nigeria operate corporate social responsibilityinitiatives which are designed to improve the quality of lives in thecommunities in which they operate. As an illustration, the Annual Reportof Year 2005 of Guimess Nigeria Plc discloses the following informationon its social responsibility initiatives, thus;ILLUSTRAUSTRATIONTION 11.2“In furtherance of the well known corporate objective of giving back tothe community in which it operates, Guinness Nigeria plc has madeseveral contributions to the society in the area of education, health,sports, culture and social infrastructure. Your company has continuedits support to the educational sector by donating computers to severalinstitutions in Lagos, Edo and Abia States as well as the Federal CapitalTerritory. The engineering scholarship scheme being sponsored by thecompany in collaboration with the Nigerian Society of Engineers is alsoon course and the first set of beneficiaries should emerge before 31 stDecember 2005. The company continued with its age-long sponsorshipsof various sporting activities such as the Kaduna International PolioTournament.”Source: Guinness Nigeria Plc Annual Report and FinancialStatements (2005, p. 18)11.6.2 Limits of Social Responsibility ActivitiesThere are limits to what human beings and companies can pass forsocial responsibility initiatives. Corporate bodies and persons havespecific missions for going into businesses. Social responsibilityconsiderations are mere secondary issues. Time, financial resourcesand capacities impose their own limitations. Where a number of peoplehave come together as a group, for some specialized purposes such asreligious worship in a church, it would not be fair to set aside asubstantial amount of the collective resources to the execution ofprogrammes which were not anticipated at the entry point of eachmember of the group. The pungent fact is that it is not only bodycorporates which have to be socially responsible. The rest of mankindshould imitate, if not surpass them.219
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FINANCIAL REPORTING AND ETHICS1.3.3
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ACCOUNTING AND REPORTING POLICIESsu
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ACCOUNTING AND REPORTING POLICIES(j
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ACCOUNTING AND REPORTING POLICIES(i
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ACCOUNTING AND REPORTING POLICIES2.
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3AMALGAMATION, ABSORPTION ANDRECONS
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AMALGAMATION, ABSORPTION AND RECONS
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4ANALYSIS AND INTERPRETATION TION O
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ANALYSIS AND INTERPRETATION OF FINA
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5ACCOUNTING STANDARDS5.0 LEARNING O
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ACCOUNTING STANDARDS(i)(ii)(iii)(iv
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ACCOUNTING STANDARDSThere is no SAS
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ACCOUNTING STANDARDS5.2.4 Borrowing
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ACCOUNTING STANDARDS(iii)Certain pe
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ACCOUNTING STANDARDSby venture capi
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ACCOUNTING STANDARDSIFRS 7 Financia
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ACCOUNTING STANDARDSactivity, non-c
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ACCOUNTING STANDARDSin the year inc
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ACCOUNTING STANDARDS(v)(vi)(vii)whe
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ACCOUNTING STANDARDS(v)Actions requ
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ACCOUNTING STANDARDSAccounting stud
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6ETHICAL FRAMEWORK, CONCEPTSAND VAL
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ETHICAL FRAMEWORK, CONCEPTS AND VAL
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7THE ENVIRONMENT: CORPORATE,PROFESS
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THE ENVIRONMENT: CORPORATE, PROFESS
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Page 167 and 168: THE ENVIRONMENT: CORPORATE, PROFESS
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Page 171 and 172: 8PROFESSIONAL ETHICS8. 0 LEARNING O
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Page 177 and 178: PROFESSIONAL ETHICSabout conflicts
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Page 181 and 182: PROFESSIONAL ETHICSA. III onlyB. II
Page 183 and 184: 9DECISION MAKING IN ETHICS9. 0 LEAR
Page 185 and 186: DECISION MAKING IN ETHICS9.2 A FRAM
Page 187 and 188: ETHICAL THREATS AND SAFEGUARDS(d)We
Page 189 and 190: DECISION MAKING IN ETHICS4. A perso
Page 191 and 192: 10ETHICAL THREATS TS AND SAFEGUARDS
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Page 201 and 202: ETHICAL THREATS AND SAFEGUARDSimmin
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Page 207 and 208: 11CORPORATE GOVERNANCE11.0 LEARNING
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Page 213 and 214: CORPORATE GOVERNANCEtrust, possible
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Page 223 and 224: CORPORATE GOVERNANCEimitated. They
Page 225 and 226: CORPORATE GOVERNANCE(a)(b)Greenbury
Page 227 and 228: CORPORATE GOVERNANCE11.9.2 Boards d
Page 229 and 230: CORPORATE GOVERNANCErelationship wi
Page 231 and 232: CORPORATE GOVERNANCE(e)(f)(g)(h)(i)
Page 233 and 234: CORPORATE GOVERNANCE(vi)Inquisitive
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Page 237 and 238: CORPORATE GOVERNANCEThe incoming au
Page 239 and 240: CORPORATE GOVERNANCEIn summary, acc
Page 241 and 242: CORPORATE GOVERNANCEAccording to Th
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Page 245 and 246: 12SOCIAL AND ENVIRONMENTALISSUES IN
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APPENDIX IICOMPREHENSIVE QUESTIONS
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COMPREHENSIVE QUESTIONS AND SUGGEST
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APPENDIX IIICASE STUDY 1Karsashi, a
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CASE STUDIES(iii)(iv)The floor sale
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CASE STUDIESShare price and dividen
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CASE STUDIESSUGGESTED SOLUTION(A) A
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CASE STUDY 3The following informati
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CASE STUDIESCASE STUDY 4Ologobojo i
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APPENDIX IVTable 1:SUMMARY OF INTER
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SUMMARY OF INTERNATIONAL ACCOUNTING
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APPENDIX VGLOSSARY OF TERMSAbsorpti
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GLOSSARY OF TERMSEthical Objectivis
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APPENDIX VIBIBLIOGRAPHYChambers Ham
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APPENDIX VIISTUDY AND EXAMINATION T
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STUDY AND EXAMINATION TECHNIQUES7.3
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INDEXAAbsorption, 17, 19, 39, 40, 4
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INDEXProfessional Behaviour, 136, 1
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