International Financial Reporting Standards and Reporting Quality of Quoted Firms in Nigeria

Abstract

This study examines the relationship between International Financial Reporting Standards (IFRS) adoption in Nigeria and the quality of annual financial reports of companies quoted on the NSE for a period of eight years 2008 to 2015. The data was derived from secondary sources from annual financial reports of the sampled firms which were in two panels; four pre-adoption and four post-adoption periods. The data on selected accounting quality metrics of earnings management, earnings smoothing, timely loss recognition, value relevance of accounting information was analysed using pool OLS. The results indicate a significant increase in all the accounting quality variables except variability in cashflow, and an insignificant relationship between financial performances on accounting quality. It is concluded that the adoption of IFRS has resulted in improvement in the quality of annual financial reports of quoted companies in Nigeria. The study therefore recommends that relevant regulatory institutions like Financial Reporting Council of Nigeria (FRCN), Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), Nigeria Insurance Commission (NIC), Corporate Affairs Commission (CAC) should ensure consistent and appropriate compliance and adoption of every requirement of IFRS so far issued by IASB by way of a pre-presentation audit, and advance the adoption of same by all other business entities operating in Nigeria.