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" Determinants of International Financial Reporting Standards’ (IFRS) Compliance among Listed Companies in Nigeria "
Aliu, Ismaila Daudu
Sanni, Mubarak
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Latin Dissertation
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| Language of Document
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English
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| Record Number
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1105459
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TLpq2310952677
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| Main Entry
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Aliu, Ismaila Daudu
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Sanni, Mubarak
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| Title & Author
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Determinants of International Financial Reporting Standards’ (IFRS) Compliance among Listed Companies in Nigeria\ Aliu, Ismaila DauduSanni, Mubarak
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| College
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Kwara State University (Nigeria)
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| Date
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2019
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| student score
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2019
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| Degree
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Ph.D.
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| Page No
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191
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| Abstract
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Many listed companies claim that their financial statements are prepared in accordance with IFRSs but the reality is different due to varying levels of compliance because the burden of complying fully with the disclosure requirements of IFRS is complex. These consequently limit the potential effect of IFRS adoption, thereby, impair the quality of financial information and the ability of investors and other users from making rightful decisions. These motivate the study to investigate the determinant of IFRS compliance among listed companies in Nigeria. The specific objectives to achieve the main objective include investigation of IFRS compliance level, determine the impact of firm specifics characteristics and corporate governance mechanisms on IFRS compliance level and assesses the extent to which IFRS compliance level differs among various sub-sector of listed companies in Nigeria using convergent parallel research design of mixed method. This method collects quantitative and qualitative data concurrently, analyses the two data sets separately and merging the results during interpretations. Annual reports of 87 listed companies in Nigeria from 2012 to 2017 which equal to 522 observations were employed to collect secondary data and was analyzed using both GLS regression autocorrelation corrected random effect and ANOVA. The primary data was obtained through interview of 7 staffers of FRC of Nigeria, NSE, CAC and Nigerian listed companies and was narratively analyzed. The findings of the study revealed that more than 70% (368 observations) of Nigerian listed companies achieved IFRS compliance level of below 49% while 27% (41 observations) achieved between 50% to 59% compliance score and only 2% (13 observations) achieved compliance score of above 60%. The overall IFRS compliance level ranged from 6% to 66% with average mean compliance level of 41%. However, the qualitative finding revealed a misconception between IFRS adoption and compliance. For firm’s characteristics, the result also shows that profitability, audit quality, and international listing have statistically significant influence on IFRS compliance level while board size, foreign board member, board diligence (meeting), audit committee expertise, and audit committee gender, among the corporate governance mechanisms, have statistically significant impact on IFRS compliance level. These was also corroborated by the qualitative findings that big 4 and international listing status influence IFRS compliance level and that it is axiomatic that a high IFRS compliance level can only be achieved where an entity deliberately and consistently puts in place a virile corporate governance structure. No more, no less! The findings also revealed that differences existed among IFRS compliance level, Nigerian listed companies and various sub-sector. The study concluded that IFRS compliance level is very low and differences existed among listed companies in various sub-sector of Nigeria. Meanwhile, the low level of IFRS compliance achieved is actually influenced by profitability, audit quality, international listing, board size, foreign board member, board diligence (meeting), audit committee expertise, and audit committee gender. Therefore, the study recommends that standard setter must clarify the difference between IFRS adoption and compliance. Regulatory agencies should intensify effort to increase IFRS compliance level, ensure presence of foreigner in the board, board member meet regularly and that, at least, each member of audit committee is financially literate.
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Accounting
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