Nigeria faced significant training and implementation hurdles as it began adopting the IASB's International Financial Reporting Standards (IFRS). From 2011, when the Nigerian National Assembly passed a law mandating IFRS, to 2014, when the final stages of adoption were completed, the entire Nigerian accounting profession was being asked to quickly adopt entirely new methods and mindsets.
The international shift from local reporting standards towards adoption of IFRS was driven by lofty ambitions such as increasing foreign direct investment, developing a standard global accounting language, increasing transparency, reducing fraud and corruption, and cutting the cost of doing business. However, in many countries, including Nigeria, the practical reality on the ground was quite challenging.
The move was a sea change for most Nigerian accountants, who had been trained in and working with accounting standards that had been set by the now-defunct Nigerian Accounting Standards Board, and they had very little exposure to international accounting standards, according to Lagos-based Oluseyi Olanrewaju, FCMA, CGMA, Ph.D., executive director, finance and executive head of department, finance, at Vodacom Business Nigeria.
Many management accountants are facing the same type of professional disruption that the Nigerian accounting community confronted when adopting IFRS. Whether it is technological upheaval, major standards changes, regulatory or political shifts, or business innovation, management accountants the world over face increasing pressure to rapidly learn new skills, technologies, and standards.
And just like with many of the transformations that management accountants face, change exposed vulnerability. IFRS adoption highlighted a significant knowledge gap at the time within the Nigerian accounting community, according to Olanrewaju, who is also the chairman of the CIMA Nigeria Branch Committee.
"Apart from the Big Four, that could draw from their international counterparts to close this gap, practically, you didn't see any Nigerian accountants that understood what it was when you talked about international accounting," he said. "I saw the gap there, and I thought, 'I need to close this gap very quickly.'"
At the time, Olanrewaju was well positioned to tackle the task.
He had been working with international reporting standards as a CFO and finance director for several years at various international technology and telecommunications organisations within Nigeria while also teaching for decades at Nigerian universities.
To help Nigerian accountants get up to speed, he wrote a book in 2012, IFRS PAL — Handy Approach, thought to be the first indigenous African textbook on IFRS. He was also one of five local instructors teaching IFRS seminars to Nigerian accountants, and consulted with individual companies on IFRS integration.
Olanrewaju offers the following tips, based on his experience with IFRS adoption in Nigeria, for finance leaders and change agents who want to help peers and organisations navigate the challenges of a major change.
Despite being legally mandated, under the threat of financial penalty, Nigeria's IFRS adoption plan had to first overcome significant local resistance to change, and fears of undue outside influence, according to Olanrewaju. Like many professional and business leaps into the unknown, there was a tendency to accentuate the negative and overlook the benefits, he said. To get past that reluctance and encourage buy-in, he encouraged participation in the process.
"Initially the reaction was very reluctant," he said. "People were like, 'Why do we have to use IFRS? What's our contribution? I hope they're not going to just dump something on Nigeria.'"
Olanrewaju encouraged Nigerian accountants to participate in the public comment portion of the adoption process to make sure they felt included. For finance professionals trying to bridge a knowledge gap, empowering participation gives people a sense of ownership in the process and helps ease fears.
Emphasise the benefits
To further boost buy-in to the changes, Olanrewaju showcased the positive impacts of IFRS through regular meetings, education, and examples. By highlighting the benefits, both to the organisation and the individual, you can engender motivation and stimulate the feeling of reward.
"People generally are reluctant or averse to change whether positive or negative," he said. "Therefore, the change agent must be focused and intentional in actualising the objectives, especially where the benefits of the change are enormous."
So whether it is the extra time for strategic initiatives that artificial intelligence (AI) and robotic process automation may provide to finance departments, or valuable career experience gained from working on an agile team, let participants know that the change isn't just a burden or a risk but a material benefit to them.
Communicate simply and clearly
Whenever there is a significant change afoot, especially when it impacts people's careers and livelihoods, Olanrewaju recommends teaching and communicating around those changes simply and clearly. Making your message as easy to understand as possible, without complicating or confusing language, goes a long way in easing people's fears and boosting their confidence to learn.
"I wrote my book in basic language so that the typical Nigerian accountant could relate to it," Olanrewaju said. Avoiding jargon or unfamiliar language also creates a more personal connection between change agent and student, allowing for a more receptive audience.
Seismic change is difficult, whether it is adopting IFRS standards or learning a new AI application or an agile way of working, and it requires time. Nigeria's adoption of IFRS took several years and required meticulous attention to ongoing developments and patience to adjust to those changes, said Olanrewaju.
Any process to bridge a knowledge gap will evolve as it is happening, and leaders, as well as learners, will need to adjust on the fly. Undue pressure will breed resentment, while patience provides a necessary space and comfort level that people need to learn.
Lead by example
Olanrewaju's efforts to introduce IFRS to Nigerian accountants is part and parcel of his broader leadership emphasis on transparency and collaboration. However, that clarity and leadership need to start at the top of the organisation. Leaders must embrace the change they are championing, and be seen doing so, to help others catch up or keep pace, according to Olanrewaju. Orders without action from leaders just feel like demands, but when others see you engaging with the same knowledge gaps and challenges, they are more apt to follow, he said.
"As CFO you must be transparent," Olanrewaju said. "You must embrace the tenets of integrity at the highest levels. You must lead the way within your organisation by example."
Drew Adamek is an FM magazine senior editor. To comment on this article or to suggest an idea for another article, contact him at Andrew.Adamek@aicpa-cima.com.