Abstract
Recently the global corporate financial reporting scene has experienced a tremendous transformation with an unprecedented number of countries and enterprises around the world adopting IFRS as a basis in preparing financial statements. In Nigeria, the journey towards adoption of IFRS started in December 2010 and thus an implementation roadmap was designed which was broken down into three phases. Based on the above affirmation, the study assesses the achievements recorded so far, challenges being encountered, and measure taken in order to ensure a smooth and successful implementation of the three phases. Hence, the study is predominantly based on review of various journals, research papers, newspaper articles, periodicals and other documentary materials of professional accounting bodies as well as conferences, seminars and workshop papers. Consequently, the study found that most publicly quoted companies listed on the Nigerian stock exchange (NSE) were still far behind in their implementation process. Thus, the reason for the delay is attributed to several factors which ranges from challenge with amendment of the existing tax laws, the level of awareness among various stakeholders, weak compliance and enforcement mechanisms, the education level and experience, insufficient technical capacity, inadequate planning on the part of companies’ management as well as inadequate private sector participation. Accordingly, suggestions were made on how to forestall these challenges and ensure a smooth and successful implementation of the next phases.
Highlights
The global corporate financial reporting scene has experienced a tremendous transformation with an unprecedented number of countries and enterprises around the world adopting International Financial Reporting Standards (IFRS) as a basis of preparing financial statements and a means of narrowing the areas of differences in accounting practice as well as improving the comparability, quality and transparency of financial information across nations (UNCTAD, 2008)
In Nigeria, the journey towards adoption of IFRS started in December 2010, following its approval by the Federal Executive Council, the Financial Reporting Council of Nigeria (FRCN) (previously known as Nigerian Accounting Standards Board (NASB)), designed an implementation roadmap for adoption of the standards which was broken down into three phases, the first of which is compliance by Banks and other significant public listed entities whom are expected to prepare their financial statement based on IFRS by 31 December, 2012
The moves towards implementation of the first phase based on the roadmap started in earnest, the Central Bank of Nigeria (CBN) as one of the main regulators initiate a partial adoption of the IFRS in Nigerian banking system, this move according to CBN was an attempt to integrate the banking system into the global best practices in financial reporting and disclosure, and a step toward enhancing market discipline and reduce uncertainties which limit the risk of unwarranted contagion (Oduware, 2012)
Summary
The global corporate financial reporting scene has experienced a tremendous transformation with an unprecedented number of countries and enterprises around the world adopting International Financial Reporting Standards (IFRS) as a basis of preparing financial statements and a means of narrowing the areas of differences in accounting practice as well as improving the comparability, quality and transparency of financial information across nations (UNCTAD, 2008). Foreign companies were initially required to reconcile their financial reports to suit the US GAAP as a criterion to be listed in the US capital market, but from 2007, companies whose financial reports are prepared in conformity with the IFRS do not have to reconcile with the US GAAP. In Nigeria, the journey towards adoption of IFRS started in December 2010, following its approval by the Federal Executive Council, the Financial Reporting Council of Nigeria (FRCN) (previously known as Nigerian Accounting Standards Board (NASB)), designed an implementation roadmap for adoption of the standards which was broken down into three phases, the first of which is compliance by Banks and other significant public listed entities whom are expected to prepare their financial statement based on IFRS by 31 December, 2012. Phase two requires other public interest entities to adopt IFRS effective 31
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