International Financial Reporting Standard (IFRS) Adoption and Its Impact on Financial Reporting: Evidence from Listed Nigeria Oil and Gas Companies

Abstract

This study seeks to investigate the impact of IFRS adoption on financial reporting in Nigeria Oil and Gas sector; whether it leads to significant financial reporting improvement in terms of value addition and quality; whether it reduces information asymmetry and increases investors’ confidence and understanding of the financial reports. To achieve this, data were collected from financial statements prepared using IFRS for the periods 2012-2016, and financial statements prepared using Nigeria GAAP for the periods 2007-2011, i.e. pre and post IFRS adoption in Nigeria for a period of 5years each. Analysis was conducted to test for the significance level of ROE, PAT/Sales, CA/CL, and debt-to-equity using mean, standard deviation of ratios, and T-test (paired) for both periods. The researcher found that Nigerian GAAP is more attractive and promising to shareholders than IFRS. In the same vein, IFRS is more attractive and promising to long term lenders than Nigerian GAAP. The study concludes that there is no significant financial reporting difference and quality as well as increased comparability and investors/shareholders return on investment, in adopting IFRS compare to the Nigerian GAAP by the listed Oil and Gas companies of Nigeria.

International Financial Reporting Standards and Earnings Management: Comparative Study of Pre-Post Full Convergence of Ifrs in Malaysia

“…In view of the seemingly inexorable rise of IFRS as the global accounting benchmark (Chua and Taylor, 2008) and critics' concerns over its uniform applicability and relevance to different institutional, political, and economic contexts (Cahan, Liu, and Sun, 2008), it is increasingly important to empirically examine the impact of IFRS adoption on accounting quality in countries of different contexts (Liu, et al 2011 According to Zakari (2017), IFRS is an International Financial Reporting Standard which was first introduced by the International Accounting Standards Board (IASB). IASB is an independent organization which is based in London (United Kingdom) but registered in United States of America (USA).…”