Effect of International Financial Reporting Standards (IFRS) Adoption on the Quality of Financial Reporting from the Perception of Professional Accountant Evidence from Companies Listed in Nigeria Stock Exchange

Abstract

This study examines the effect of IFRS adoption on the quality of financial reporting of companies listed in NSE. The objectives of this study are to determine whether there is a significant effect of IFRS adoption on the quality of financial reporting of companies listed in NSE, to appraise challenges face by companies in adoption of IFRS in Nigeria. Stratified random sampling was taken in the study whereby data were collected from 55 randomly selected companies covering the major business sectors in Nigeria. Primary data were gathered through a well-structured questionnaire. Descriptive statistics and percentage analysis were performed by using Statistical Package of Social Sciences (SPSS). This study reveals that there is a significant effect of IFRS adoption on the quality of financial reporting companies listed in NSE and moreover it reveals that most of the companies face challenges in adoption of IFRS. Further, the study reveals that IFRS can enhance the acceptability of financial reporting in Nigeria. Based on these findings, it is recommended that Financial Reporting Council of Nigeria should embark upon aggressive awareness campaign to highlight the overriding benefits of IFRS while regulatory agencies, companies, the government and other stakeholders should provide adequate training and support the companies for effective adoption and practice of IFRS in Nigeria. Furthermore, implementation of the standard to its totality by firms should be encouraged and regulatory authorities such as the Securities and Exchange Commission of Nigeria, Financial reporting council of Nigeria and external auditors should monitor strict compliance with adoption of IFRS.