The Financial Reporting Council (FRC) is set to sanction Alliance and General Insurance Ltd and Alliance and General Life Assurance over issues relating to contraventions in their respective 2010 audited financial statements.

According to a statement on its website on Friday, FRC stated that in the course of the review of the 2010 audited accounts submitted to National Insurance Commission (NAICOM) by the above two companies, some errors and lapses were observed and communicated accordingly to the companies by NAICOM, regretting that rather than deal with the issues raised, the companies provided entirely different sets of accounts, incorporating items that were not originally included in the accounts under review and signed by same firm of chartered accountants.

The FRC stated that when the matter was brought to its attention, the Council requested the two companies to submit the versions they regarded as the Financial Statements that should be relied upon, noting that the financial statements sent to it were reviewed and that several non compliance with Statements of Accounting Standards were also observed.

It noted that on July 31, 2012, a closing meeting was held with the team from both companies, with representatives of their External Auditors (both disengaged and new), Asset Management Corporation of Nigeria (AMCON), Institute of Chartered Accountants of Nigeria (ICAN) and NAICOM in attendance, certain issues were taken into consideration before reaching some decisions.

“The Council discovered non consolidation of their subsidiaries, accounting abuses noted in the said 2010 financial state-ments, the tax issues (non disclosures) dating from 2007 and the liabilities now unnecessarily held by AMCOM are strong enough to mislead a significant stakeholder, lapses in corporate governance; policyholders are exposed to untold risks and the approach to changing External Auditors and the confusing assignment given to them are questionable.”

For amicable resolution of the contraventions, FRC directed the boards of the companies to refrain from engaging any external auditors on the said 2010 accounts and financial statements and submit itself to the NAICOM, their primary regulator; NAICOM was notified to take some measures to restore sanity in the organisations.