Address by Mr. Okon Okon, Executive Chairman, Akwa Ibom Internal Revenue Service at the International Accountancy Week

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Keynote address by Mr. Okon Okon, Executive Chairman, Akwa Ibom State Internal Revenue Service (AKIRS), at the 2021 International Accountancy Week Seminar/Award Night held on Saturday, 13th November 2021 at Watbridge Hotels & Suites, IBB Way, Uyo, Akwa Ibom.

Protocol,

It gives me great pleasure to be here with you this evening. Many thanks to the organizers – the Institute of Chartered Accountants of Nigeria (ICAN), Uyo & District Society, Association of National Accountants of Nigeria (ANAN), Akwa Ibom State branch, and by extension the International Federation of Accountants (IFAC), for inviting me to deliver this keynote address. I feel indeed honoured by the opportunity to address this distinguished gathering of dignitaries and professional accountants, at a time like this. Accountancy is one of the professions I cherish therefore, I am delighted to be a part of this great celebration.

I am aware that the International Accountants’ Day, celebrated globally on 10 November each year, is a special day set aside to promote the accounting profession and celebrate the great contributions of accountants in making business enterprises to thrive, supporting economies to grow and helping individuals to navigate through the complexities of finance. I am therefore excited by the theme of this year’s celebration, which you have asked me to speak on, that is, the role of Accountants in Economic Development of Akwa Ibom State.

The practice of accounting has evolved drastically from the days of Luca Pacioli’s double-entry bookkeeping in the 15th century, through the 19th century when the first accounting organization, the American Institute of Certified Public Accountants, was established in 1887, solidifying the status of accounting as a profession, the beginning of technology-based accounting in the 20th century, to a more advanced and digitalised accounting practice in the 21st century. Although technology has significantly altered the mode of practice over the centuries, the principles still remain the same, with the overall aim of ensuring transparency and accountability in financial matters in both public and private sectors.

In dealing with the theme for this year’s celebration, the obvious question would be: what do the Accountants really do? To an ordinary person, it’s nothing more than counting money, recording money and presenting, maybe, the statements of income and expenditure or audit reports. But obviously, your roles in the society and in economic development are much more than that! While I do not want to bore you by attempting to define your profession, permit me for the sake of the non-accountants present here to summarize the list of services rendered by the accounting profession as that which cut across basic bookkeeping, general accounting practice, external and internal auditing, tax practice, budgeting, valuation, human resource development, financial advisory, bankruptcy and insolvency services, forensic services, business leadership, amongst others!!

The President of ANAN, Prof. Benjamin Chuka Osisioma, in his 2012 public lecture on “THE ROLE OF PROFESSIONAL ACCOUNTANTS IN SUSTAINABLE ECONOMIC GROWTH IN AN UNSECURED AND CORRUPT ENVIRONMENT”, defined a professional accountant as “one who has acquired broad-based knowledge and skills of accounting practice, and has been formally admitted into a recognized body with the formal charter, and made subject to rules of conduct that conform to the highest ideals of expert protocol”.

So, what exactly are the specific contributions of accountants to the economic development of Akwa Ibom State? For me, the answer is both an easy and a difficult one. It is easy because your essential contributions across the areas aforementioned are evident in every sphere of our national life and development trajectory. The difficulty is that your contributions to our State over the years, cannot be exhausted in a single presentation like this. One can only attempt to highlight a few of them, and I would do just that in the few minutes I have been given to speak.

Let me begin by paying special tribute to all members of ICAN and ANAN in Akwa Ibom State, especially those working with us at various MDAs across the State and in the private sector as well, for your unwavering devotion in serving our dear State, and in so doing, proving yourselves as dependable partners in the wheel of progress of Akwa Ibom State. Again, I recall the famous words credited to Luca Pacioli, an Italian Mathematician, regarded as the father of accounting, being the first person to publish detailed material on the double-entry system of accounting, that ‘’a person should not go to sleep at night, until the debits equal the credits’’. It is simply amazing, therefore, to imagine how many nights some of you, our accountants, both at the public and private sectors, may have done without sleep just to ensure that our financial records are in order and the economy of our State is on track. I salute you for always maintaining high professional values, ethics and standard in discharging your responsibilities to advance the public interest.

Distinguished ladies and gentlemen, accounting, as we all know, is a service activity, whose key function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making business and economic decisions, and in making informed choices about alternative courses of action. Without doubt, accounting is the major backbone of any successful business endeavour and for achieving sustainable economic growth and development, around the world. Indeed, behind every thriving business enterprise and strong economy, there must be great accountants that play active roles. As long as finance constitutes one of the critical ingredients for the survival of economic agents – be it households, business firms or governments, the importance of accounting would continue to assume prominence over time. What will be changing even frequently are the mechanism, standards and frameworks.

Suffice to note that the contributions of accounting profession to economic development of nations around the world, are gaining more global recognition. According to a research from the Consultative Committee of Accountancy Bodies (CCAB)[1], accounting profession contributed a whopping £59 billion to GDP in the UK in 2017, with £21 billion generated by the activities of the accounting industry alone and £38 billion coming from in-house accountants embedded within other industries across the UK economy. It is also of interest to note that the profession employed around 613,100 individuals and generated £8.9 billion in tax revenue for the UK within the same period. This includes income tax and national insurance contributions deducted from the wages of accountants (working in practice and industry), as well as other support workers in the accountancy service sector. It also includes the business rates, VAT and corporation taxes paid by accounting service firms.

In Ireland, the accountancy profession was reported to have generated €1.3 billion in tax revenue, provided 61,200 jobs for individuals and contributed €12.9 billion to GDP in 2017, with one quarter of the amount (€3.2 billion) coming from the accounting industry alone, and the balance from in-house accountants within other Irish industries.

Although no such data is available for Nigeria and in Akwa Ibom State, what is clear is that there are many accounting and audit firms across Nigeria and in Akwa Ibom State today that have equally contributed in employment creation, revenue generation and to the economic growth of the national and sub-national economy. At the national level, we have the likes of KPMG, Ernst & Young, Deloitte Nigeria and PricewaterhouseCoopers (PwC) Nigeria, BDO, McKinsey & Company Nigeria, amongst others, that are providing multidisciplinary professional services within the Nigerian business community, helping to transform their operations and performances, and therefore, driving growth of the Nigerian economy. In Akwa Ibom State, we have over 190 registered firms of Chartered Accountants, working for the advancement of the state economy[2].

Distinguished ladies and gentlemen, I am pleased to note that our ability, as a State, to deliver on infrastructural development, massive industrialization drive and across other layers of our development paradigm, especially in the last couple of years, bears full imprints of your highly esteemed profession. In the midst of a challenging economic environment that confronted us since 2015, including two major recessions, dip in oil prices and other unprecedented shocks and disruptions induced by the COVID-19 pandemic, we probably would have done badly if we didn’t have someone at the highest level of our economic management with deep knowledge of accounting.

As you are aware, His Excellency, our Governor, Mr. Udom Gabriel Emmanuel, is a man with extensive accounting, banking, financial management, economics and taxation background. As an astute administrator, and a Chartered Accountant, with in-depth knowledge of income optimization, financial control and strategic planning, he has continued to place high premium on financial prudence and fiscal responsibility in order to deliver the dividends of democracy to the good people of Akwa Ibom State. Indeed, the performance of His Excellency, amidst the challenging times, gives us a good summary of how much our State has benefited from this noble profession – Accountancy.

Permit me to say, His Excellency didn’t do it by himself alone. He did it through your active support for his vision and policy thrust of enthroning public sector accountability and transparency in the management of our common resources. This is also consistent with the need to ensure that we gradually move away from overdependence on federal allocations to support our development projects, by focusing our attention on domestic resource mobilization, wealth maximisation and optimization, blocking leakages where it exist and utilizing our scare resources solely for the development of our dear State.

In the area of budgeting, which you have continued to play a leading role, Akwa Ibom State is soaring high. Our budgets are being prepared using the best accounting techniques and structured in a way that guarantees people-centred participation and buy-in. The process engenders effective monitoring, tracking, assessment and evaluation of its implementation. Only last year, a survey conducted by the Civil Resource Development and Documentation Centre (CIRDDOC), ranked Akwa Ibom State as one of the best performing states in sub-National Budget Transparency[3]. Similarly, we were ranked among the top 5 states in the federation in the adoption of International Public Sector Accounting Standards (IPSAS) by the Governor’s Forum[4].

Still last year, as a State, we qualified for and benefitted from the World Bank’s State Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme DLI 31 which has to do with meeting timeline for completion of the State 2020 COVID-19 responsive budget process. A feat that accounting service played a significant role. This is a testimony of how much you have partnered with the government to improve budget transparency, efficiency and participation, as well as, ensuring holistic reporting of Government’s financial transactions and positions.

Distinguished ladies and gentlemen, I would not fail to appreciate your role in capacity building and human capital development, in the training and re-training of our workforce, to ensure that they remain at the cutting age of knowledge in the field of accounting. I sincerely commend ICAN, Uyo & District Society and ANAN, Akwa Ibom branch for imparting sound professional training to your members who work across the State and for sustaining an enviable standard over the years. However, let us not lose sight of the possible downsides of not maintaining high professional and ethical standards which can seriously damage the economy or erode the gains so far made. Instances abound not only in Accounting but also in other professions where lack of strict adherence to professional standard and ethics ruined businesses and economies with huge domino effect; in some cases globally. Lessons of such cases must not be lost on us professionals.

At Akwa Ibom State Internal Revenue Service (AKIRS), I am pleased to report that I have an opportunity to work with great minds and accounting experts, in taking the Agency to new heights. Consistent with the hallmark of financial transparency and accountability of the present government, we were able to achieve significant milestone in our first year in office, by growing the State’s IGR from as low as N14.79 billion in 2016 to N16 billion by 2017. By 2018, we moved it further to N24.21 billion and then to a historic record of N32.2 billion in 2019, representing over 2 times the highest annual IGR (about ₦15bn) in the first 30 years of the creation of the State. Despite the adverse impact of the COVID-19 pandemic on businesses and the generous tax waivers from the State Government to cushion the impact of the pandemic, we were still able to generate as much as N30.70 billion in 2020.

Can we do better than this? Yes, we can! There are higher prospects to do more and we need you to play more active roles than ever before, in making that to happen, by unlocking the existing potentials for growth, to build Akwa Ibom of our dream, that is fiscally sustainable and resilient to external shocks and vulnerabilities. For instance, the repositioning of AKIRS via autonomy granted by His Excellency, the Governor has created significant improvement in voluntary tax compliance by our teeming taxpayers. This has led to high demand for tax services by the taxpayers in order to honour their obligations timely and adequately. Accountants can fill this gap and make money for themselves as well as promote tax payment culture amongst the tax public in the State.

Furthermore, with the foundation laid by the present administration, Akwa Ibom State is gradually heading towards becoming an emerging subnational economy in the Gulf of Guinea. This evening, I am proud to say that Akwa Ibom is becoming a choice destination for investors. The trajectory of our sub-national aviation & tourism sector, maritime, oil and gas, manufacturing and agricultural value chain, amongst others is very interesting with a lot of opportunities for accounting services. This will also open up roles for tax consultants and accounting technicians for the diverse categories of taxpayers across the State, who would certainly need your professional advice and services. There are a lot of business enterprises out there that need your technical services on how to properly manage their balance sheets, cashflows, income & expenditure budgets, grow their businesses and ensure compliance with existing tax laws in Akwa Ibom State.

I therefore urge you to rise to these opportunities.

As attractive as the current opportunities may appear, I wish to however draw your attention to the emerging reality concerning global trends and events which are gradually transforming the world of work and reshaping the future of many professions, including the accounting profession. In today’s world, digitalization and automation of accounting processes have become a necessity rather than a choice. Any professional accountant who does not embrace technological change will undoubtedly take his place on the dusty pages of history.

Today, digital technologies are transforming or disrupting businesses. Deeper expertise in automation and cognitive technologies is increasingly prized. In a world of resources constraints and disrupted business models, value is created by more than just having financial capital. You would need new knowledge of digital tax management, risk modelling, blockchain technology, data science and analytics, cloud accounting, among others, to support business transformation and economic growth. In a time like this, the words of Charles Darwin become relevant, when he said that “it is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”.

This is also in the centre of contemporary management thinking as espoused by Profs. W. Chan Kim & Rinee Mauborgne in their bestseller, Blue Ocean Strategy, Harvard Business School Publishing Corporation 2015. Survival in the red ocean competition is about having the capability of transiting to a fresh area – the blue ocean.

It would be difficult for human financial analyst to compete with Artificially Intelligent financial analysis software that can quickly read and recognize trends in historic data to predict future market moves. In fact, experts anticipate that as many as 800 million jobs could be replaced with Artificial Intelligence (AI) Technology by the year 2030. To remain relevant, therefore, particularly in this challenging period of COVID-19, you must be willing to adapt, learn and unlearn, sharpen your skills, and embrace new technologies to take a centre stage in protecting businesses and organizations.

At Akwa Ibom State Internal Revenue Service, we have made significant progress towards harnessing the emerging technologies to improve performance of our deliverables. Apart from constant capacity building, tax education and awareness creation, re-organising the structure of AKIRS, we have put machineries in place to fully automate the process of remittance by revenue sources. As we continue to deepen this process, it is creating another opportunity for you to partner with us, by offering professional services to clients in mastering this new process.

CONCLUSION

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Before concluding, I want to urge you once again, as the backbone of our development effort, to continue in upholding those salient values and professionalism which you have cultivated over the years. The progress of this State depends to a large extent on the parts you play. As accounting professionals, auditors, tax practitioners, business advisors and fund management experts, you are privy to the most intimate financial details of corporate organizations, private enterprises and public institutions, across the State. Any mis-management of such information could spell serious trouble for the State and firms, either in-terms of low tax returns to the government, collapse of businesses, loss of employment and a drag to socio-economic prosperity.

AKIRS is committed to working with you to take our State to a higher dimension. We have what it takes to become an amazing economy, the new subnational economic hub of Africa, with shared prosperity for all citizens, by leveraging on the existing foundation that the current administration has laid. In getting to that destination, we must continue to abide by the principles of transparency, accountability and other best practices, in both the public and private sectors.

Ladies and gentlemen, once again, I would love to thank the organizers of this event for inviting me and to share in the joy of your celebration this evening. The Akwa Ibom State Government, I believe, celebrates you. The State Internal Revenue Service celebrates you. The Akwa Ibom business community celebrates you.

While wishing you a beautiful event, I look forward to more collaboration and support, as we march into year 2022 with renewed hope and enthusiasm for greater things to come.

Congratulations on a successful week-long event and thank you for your kind attention.

God bless the Accounting Profession!

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