Events After the Reporting Period and Investment Decisions in Manufacturing Companies in Nigeria

Abstract

Investors worldwide require a high level of credibility and certainty from firms’ financial reports to anchor their investment decisions. Thus, it is paramount for firms to comply with the regulatory framework to make the latter a success. On this basis, this study aims to determine how disclosure and adjustments of events after the reporting period (IAS 10) affect investment decisions in manufacturing companies in Nigeria. The study employed a descriptive survey design. Out of a total population of 25 manufacturing companies, 15 were specifically selected for the study. A questionnaire was used to collect data from the companies’ six principal officers, including the managing director, the accountant, the credit officer/risk manager, the quality control officer, the internal auditor, and the operation/plant manager. The mean and standard deviation were used to answer research questions. The PPMC and linear regression analysis were used to test the hypothesis at the 0.05 significance level. It was found that the level of compliance with IAS 10 on disclosure and adjusting events after the reporting period is high among manufacturing companies. Also, disclosure and adjusting events significantly impact the investment decisions of manufacturing companies. The research suggests that relevant authorities strictly adhere to reporting criteria based on the results.