The adoption of the International Financial Reporting Standard (IFRS) and the quality of corporate financial reports by quoted companies in Nigeria

Abstract

This is a study on an adoption of IFRS as well as the quality of corporate financial reports of quoted companies. This study adopts desktop research and explorative research design to evaluate the relevant stages of adoption of IFRS in Nigeria by quoted companies. Further, it utilizes a survey design to gather data from holders of equity in quoted companies in Nigeria. Using purposive sampling, a sample size of 150 was chosen, questionnaires administered and data collected were analyzed using parametric and non – parametric tests. For a test of reliability, the questionnaire was subject to Cronbach’s alpha tests. Moreover, out of 150 copies of questionnaires administered 114 were returned. The data analysis shows that there is a positive correlation between quality of corporate financial report and the predictors which comprises verifiability, period of investment, timeliness, earnings quality, comparability as well as understandability. It, also, indicates that predictors accounts for 29.9% of the quality of corporate financial report while the regression model statistically significantly predicts the quality of corporate financial report. This study concludes that the IFRS adoption by quoted companies in Nigeria improves the quality of corporate financial reporting. It, therefore, recommends that the Financial Reporting Council of Nigeria should improve its monitoring and enforcement measures while relevant regulatory frameworks, legislative processes and corporate governance mechanisms should be strengthened.