INTERNATIONAL FINANCIAL REPORTING STANDARD AND THE QUALITY OF FINANCIAL REPORTING IN NIGERIA
ABSTRACT
This study is motivated by a desire to examine international financial reporting standard and the quality of financial reporting in Nigeria. In light of the empirical review and other discussions, a number of questions arose as to whether there is positive relationship between IFRS and financial reports in Nigeria. Questionnaire was administered to some selected staff of the sampled banks operating in Nigeria. Data was collected and analyzed using the simple percentage, descriptive statistics and Z-test statistical tool. This study revealed among other things that there is a positive relationship between IFRS and financial reports in Nigeria. It is recommended that there should be more emphasis on awareness of IFRS adoption among accountants in Nigeria.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
Background to the Study                    
Statement of the Research Problem                
Objectives of the Study                     
Research Hypothesis                         
Scope of the Study                         
Significance of the Study                     
Limitation of the Study                        
References                                
CHAPTER TWO: LITERATURE REVIEW
Introduction                             
Overview of IFRS                            
Pros and Cons of IFRS Adoption                
Why Do Countries Adopt IFRS                    
IFRS Adoption: Economic Development            
IFRS Adoption - Action Plan for Implementation         
IFRS Adoption: Benefits                             
IFRS Adoption: Potential Challenges                 
Financial Statement Effects of IFRS Implementation        
The Effect of IFRS Adoption on Financial Disclosure     
References                             
CHAPTER THREE: RESEARCH METHODOLOGY
Introduction                            
Research Design                                
Population                                
Sample Size                                
Sampling Technique                        
The Research Instrument                    
Method of Data Analysis                        
References                            
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
Introduction                        
Descriptive Statistics                         
Test of Hypothesis                 
CHAPTER FIVE:    SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
Introduction                             
Summary of Findings                         
Conclusion                                 
Recommendations                         
Bibliography                                 
Appendix                                
CHAPTER ONE
INTRODUCTION
BACKGROUND TO THE STUDY
Accounting scholars, practitioners and regulators have been carrying debates over measurement and disclosure issues in order to achieve internationally comparable and high quality financial statements. Considerable amount of progress has been achieved in terms of harmonization and convergence of accounting standards although there are still differences among the national reporting practices. 1 January 2005 marks the day for the start of global accounting convergence. Effective from this date on, European Union (EU) required the companies whose shares are traded in the EU Stock Exchanges to prepare their consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU. Some other countries also either required the use of IFRS as is or adopted the standards by building into their national accounting standards around the same date. For example, Australia revised national accounting standards and required Australian companies to use Australian IFRS starting at 1 January 2005 (Akman, 2011).
It is known that information disclosed in the financial statements of a company is a function of its environment, where culture is an important factor. Earlier studies demonstrate that cultural dimensions developed by Hofstede (1984) influence the level of financial disclosure of firms in different countries (Zarzeski, 1996; Jaggi and Low, 2000; Hope, 2003; Archambault and Archambault, 2003).  
The implementation of IFRSs would reduce information asymmetry and would subsequently smooth the communication between managers, shareholders, lenders and other interested parties (Bushman and Smith, 2001), resulting in lower agency costs (Healy and Palepu, 2001). Lower information asymmetry would also lead to lower costs of equity and debt financing (El-Gazzar et al, 1999; Botosan and Plumlee, 2002). The benefits of implementing IFRSs include higher comparability, lower transaction costs and greater international investment. IFRSs also assist investors in making informed financial decisions and predictions of firm future financial performance (Street et al, 2000) and give a signal of higher quality accounting and transparency (Tarca, 2004; Tendeloo and Vanstraelen, 2005). Therefore, IFRSs would tend to reduce earnings manipulation and enhance stock market efficiency (Kasznik, 1999; Leuz, 2003), while they would also tend to positively impact on firms’ stock returns and stockrelated financial performance measures (Guidry et al, 1999; Chung et al, 2002).
STATEMENT OF THE RESEARCH PROBLEM
The adoption of IFRSs tends to enhance transparency, disclosure and comparability (see Biddle and Saudagaran, 1989). It is evident that the implementation of IFRSs reinforces stock market liquidity and leads to lower cost of capital and transaction costs, higher market value and better reputation (Leuz and Verrecchia, 2000). The higher disclosure requirements and financial reporting quality that stem from IFRSs imply that the adoption of IFRSs would give a positive signal to investors as information asymmetry and agency costs tend to diminish (Tarca, 2004). It appears, therefore, that firms that adopt IFRSs would tend to display lower potential for earnings management (Leuz and Verrecchia, 2000; Ashbaugh, 2001; Ashbaugh and Pincus, 2001; Leuz, 2003). Less subjectivity would lead to fewer opportunities to influence reported earnings and bonuses and/or mislead investors. Hence, in countries with strong investor protection mechanisms, such as the UK, the costs of IFRS adoption would tend to be lower because the level of earnings management is lower as managers are less inclined to manipulate the reported accounting figures (Nenova, 2003; Dyck and Zingales, 2004; Renders and Gaeremynck, 2007). In contrast, in countries with weak investor protection mechanisms, the scope for earnings management would tend to be higher and the quality of financial reporting lower, implying that the costs of adopting IFRSs would be higher (Ali and Hwang, 2000; Hung, 2001).
In the light of the above, the following research questions are raised:
Is there positive relationship between IFRS and financial reports in Nigeria?
Is there significant relationship between IFRS and leverage reporting?
Is there significant relationship between IFRS and credibility of financial statement?
OBJECTIVES OF THE STUDY
The objective of this study is to examine the impact of IFRS and the quality of financial reporting in Nigeria.
The specific objectives are:
To determine if there is positive relationship between IFRS and financial reports in Nigeria.
To examine if there is significant relationship between IFRS and leverage reporting.
To find out if there is significant relationship between IFRS and credibility of financial statement.
 RESEARCH HYPOTHESIS
The following hypotheses have been formulated to serve as a base for this research.
Hypothesis I
Ho:    There is no positive relationship between IFRS and financial reports in Nigeria.
H1:    There is a positive relationship between IFRS and financial reports in Nigeria.
Hypothesis II
Ho:    There is no significant relationship between IFRS and leverage reporting.
H1:    There is a significant relationship between IFRS and leverage reporting.
Hypothesis III
Ho:    There is no significant relationship between IFRS and credibility of financial statement.
H1:    There is a significant relationship between IFRS and credibility of financial statement.
SCOPE OF THE STUDY
The study is undertaken to examine IFRS and the quality of financial reports in Nigeria. The population of the study is the entire quoted companies operating in Nigeria, while the sample size is restricted to some selected staff of five banks quoted in the Nigeria Stock Exchange,.
SIGNIFICANCE OF THE STUDY
It is expected that this study would consolidate existing literature on the issues surrounding the relationship between IFRS and the quality of financial report and thus boosting the empirical evidence from Nigeria. Furthermore, given the empirical nature of the study, the outcome of this study would aid policy makers and regulatory bodies in economic modeling and policy simulation with respect to the selected variables examined in the study.
 The result of the study would be of benefits to investment analysts, investors and corporations in examining the effectiveness of IFRS and the quality of financial report.  
It will also be useful in stimulating public discourse given the dearth of empirical researches in this area from emerging economies like Nigeria.
Finally, it would also add to the available literature on the area of study while also providing a platform for other researchers who may want to further this study.  
LIMITATION OF THE STUDY
The major constraints of this project are sourcing enough materials for this buildup. This is as a result of newness of the subject of research. Also, the unco-operative attitude of some respondent greatly affected the adequate collection of data from the fieldwork.
 REFERENCES
Akaman, N. H. (2011), The Effect of IFRS Adoption on Financial Disclosure: Does Culture Still Play A Role? American International Journal of Contemporary Research, 1(1):6-17.
Alexander, D. and S. Archer (2001), “European Accounting Guide”, Harcourt Brace, San Diego, CA.
Ali, A. and L. Hwang (2000), “Country-specific Factors Related to Financial Reporting and the Value Relevance of Accounting Data”, Journal of Accounting Research, 38(1): 1-21.
Andrews, B. (2005), “Standards Deviation”, Business Review Weekly, 17 February, 86.
Archambault, J.J. and M.E. Archambault, (2003), “A Multinational Test of Determinants of Corporate Disclosure‟, The International Journal of Accounting, 38(3):42-67.
Ashbaugh, H. (2001), “Non-US Firms’ Accounting Standards Choice”, Journal of Accounting and Public Policy, 20 (2):129-153.