ABSTRACT
IFRS (International Financial Reporting Standard) was used by few banking sector and as at 2012, it gained full ground in the banking sector of Nigeria. However, before its acceptance, Nigeria General Accepted Accounting Practice (N GAAP) was in the country. Its internationally acceptance advantage caused several banking firms to change. This study investigated the impact of IFRS adoption on earnings management of non-financial quoted companies in Nigeria. I used a sample of 50 non-financial quoted companies in Nigeria that has consistently published their audited annual financial report between 2010 and 2014. In analyzing the collected data, I adopted descriptive statistics, correlation analysis and a panel multiple regression data analysis to identify the possible effects of IFRS adoption on general earnings management of Nigerian non-financial quoted companies. I find that IFRS adoption in Nigeria does not significantly affects the tendency of Nigerian companies to manipulate earnings. I also find that higher audit quality and large firm size does not created a situation where IFRS adoption affects earnings management. Therefore, it is recommended that roadmap to the convergent with IFRS in Nigeria which required all the significant public interest entities to comply with IFRS starting from 1st December, 2012 should be reviewed and allow certain companies without significant customers or operations outside Nigeria to continue the application of NGAAP because they may not have the capability and a market incentive to prepare IFRS financial statements and it has been established that IFRS does not always lead to an improvement in financial reporting quality. The study further recommended that regulatory authorities such as Security Exchange Commission (SEC) and Financial Reporting Council of Nigeria (FRCN), should device means of encouraging quoted companies in Nigeria to employ the service of Big4 audit firm so as to enhance high audit quality. The results indicate that high audit quality work as a constraint on earnings manipulation and consequently, reducing the level of earnings management practices. A regression analytical method was used to determine the statistical true of this study and it was proven that IFRS impacted the quality of financial statement with calculated value of r=0.850 against critical value of 1.89.
TABLE OF CONTENTS
TITLE PAGE
CERTIFICATION
DEDICATION
ACKNOWLEDGEMENT
ABSTRACT
CHAPTER ONE
1.0 INTRODUCTION
1.1 STATEMENT OF PROBLEM
1.2 AIM AND OBJECTIVES OF THE STUDY
1.3 RESEARCH QUESTION
1.4 RESEARCH HYPOTHESIS
1.5 SCOPE AND LIMITATION OF THE STUDY
1.6 SIGNIFICANCE OF THE STUDY
1.7 DEFINITION OF TERMS
1.8 ORGANIZATION HISTORY
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 THEORETICAL REVIEW OF IFRS
2.1.1 HISTORICAL BACKGROUND OF IFRS DEVELOPMENT
2.1.2 IMPLEMENTATION OF IFRS IN NIGERIA
2.1.3 BENEFITS OF IFRS ADOPTION
III. CHALLENGES OF ADOPTING IFRS
2.1.4 IFRS AND COMPARABILITY OF FINANCIAL REPORTS
2.1.5 THE IMPORTANCE OF ACCOUNTING KNOWLEDGE
2.1.6 USERS OF FINANCIAL STATEMENTS
2.1.7 NIGERIA AND IFRS ADOPTION
2.2 EMPIRICAL REVIEW OF FINANCIAL REPORTING QUALITY
2.2.1 IFRS AND FINANCIAL REPORTING QUALITY
2.2.2 THE ASSUMPTIONS OF FINANCIAL STATEMENTS
2.2.3 QUALITATIVE CHARACTERISTICS OF FINANCIAL STATEMENTS
2.2.4 ELEMENTS OF FINANCIAL STATEMENTS
2.1.4.1 EQUITY
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 STUDY AREA
3.2 RESEARCH DESIGN
3.3 POPULATION OF THE STUDY
3.4 POPULATION SIZE AND TECHNIQUE
3.5 DATA COLLECTION METHOD
3.6 DATA ANALYSIS
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 DATA ANALYSIS AND PRESENTATION
4.2 TEST OF HYPOTHESIS
4.2.1 TEST OF HYPOTHESIS 1
4.2.2 DISCUSSION OF RESULT 1
4.2.3 TEST OF HYPOTHESIS 2
4.2.4 DISCUSSION OF RESULT 2
4.2.5 TEST OF HYPOTHESIS 3
4.2.6 DISCUSSION OF RESULT 3
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION AND RECOMENDATION
5.1 SUMMARY OF FINDINGS
5.2 CONCLUSION
5.3 RECOMMENDATION
REFERENCES
APPENDIX
