The President of the Federal Republic of Nigeria recently gave assent to the Companies & Allied Matters Act 2020 (CAMA 2020) which is expected to bring about significant changes to the provisions of the existing Companies & Allied Matters Act CAP C20 LFN 2004 (CAMA 1990). This article aims to highlight the significant changes relating to the preparation and filing of companies’ financial statements as follows:

Maintenance of accounting records.

In addition to the general requirement for the keeping of accounting records, CAMA 2020 now requires the directors of parent companies that deal in sale of goods and having subsidiary undertakings that do not deal in goods to take reasonable steps to ensure that the subsidiaries keep such accounting records as to enable the account of the parent company to be prepared in accordance with the requirements of the Act. Public companies are now also required to display audited accounts on their website.¹

Place, duration, and form of records

In line with present realities as they relate to electronic communications. in addition to the requirement for maintaining hard copies, companies are now allowed to keep electronic copies or registers of any document or record which they are required to maintain under the Act.²

Form and Content of Individual financial statements

CAMA 2020 has taken into consideration the changes in the requirements for the preparation of financial statements in Nigeria after CAMA 1990 was enacted especially following the setting up of the Financial Reporting Council. Financial Statements are now  required to comply with the provisions of the CAMA 2020 and the accounting standards laid down in the statements of accounting standards issued by the Financial Reporting Council of Nigeria.³

Exemption from Audit Requirement

CAMA 2020 has now provided some succour for small and medium enterprises and companies which are yet to commence operations. Small companies⁴ and companies which are yet to commence operations have now been exempted from the requirement for preparing annual audited financial statements.⁵

Mode of filing of Documents to be annexed to annual returns

CAMA 2020 now allows for any document required to be annexed to an annual return to be delivered to the Corporate Affairs Commission in hard copy or through electronic communication.⁶

1. Section 374 (4) & (5) CAMA 2020
2. Section 375(3) CAMA 2020
3. Section 378 (1) CAMA 2020
4. Defined in section 394 as a company with a turnover and nets assets value of less than as N120 million and N60 million, respectively.
5. Section 401 CAMA 2020
6. Section 422 CAMA 2020