THE EFFECTS OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) IN NIGERIA: A TEST OF FINANCIAL STATEMENT QUALITY. A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
The IFRS adoption is already an issue of global relevance among various countries of the world due to the quest for uniformity, reliability and comparability of financial statements of companies. This research paper investigated the effect of IFRS adoption on Financial Statements. The population consists of quoted companies in Nigeria Stock Exchange (Preparers) and Investment Analysts (Users). Simple Random sampling method was adopted and primary data used to elicit responses with 71 structured questionnaires administered. Findings showed that IFRS has been adopted in Nigeria but only fraction of companies has implemented with deadline for the others to comply. It is perceived that IFRS implementation will promote quality financial statements, increase FDI inflows and economic growth. It was recommended that all stakeholders should endeavour to have full implementation to reap benefits of the global GAAP and principle – based standards
Key-words: International Financial Reporting Standards, Financial Statements, Foreign Direct Investments. Economy
1.1 BACKGROUND OF THE STUDY
Globalization of markets requires a unified global accounting, reporting and disclosure sets of standards. As a result of increasing volume of cross border capital flows and growing number of foreign direct investments in the globalization era, the need for the harmonization of different practices in accounting and the acceptance of worldwide standards has risen. This has led to either convergence or adoption of the international financial reporting standards in countries across the globe including Nigeria (Adejola, 2012). Financial statements apart from stating the financial position and performance of an organization, provides other information such as the value added, changes in equity if any and cash flows of the enterprise within a defined period of time to which it relates (Iyoha and Faboyede, 2011).