Does Adoption of International Financial Reporting Standards (IFRS) Affect Financial Performance? Evidence from Nigerian Deposit Money Banks

Author:

Aggreh Meshack,Malgwi Charles A.,Enyi-Igbokwe Amanda E.,Aggreh Mercy S.

Abstract

This paper examines the effect of International Financial Reporting Standards (IFRS) adoption on financial performance of eleven (11) deposit money banks listed on the Nigerian Stock Exchange (NSE) as at December 31, 2014. The Wilcoxon Signed-Rank test was used to test whether significant differences exist in the profitability, liquidity and leverage ratios of the selected banks using IFRS and Nigerian Statement of Accounting Standards (SAS) based financial statements. The results show that adoption of IFRS does significantly affect financial performance of Nigerian deposit money banks. Specifically, IFRS adoption significantly and positively affects profitability of Nigerian deposit money banks, while it significantly, but negatively affects their liquidity and financial leverage. The study recommends continuous enlightenment campaigns on the potential effects of IFRS implementation by the regulatory authorities, professional bodies and the government as more and more firms in Nigeria change from SAS based financial reporting to IFRS. Furthermore, firms should endeavour to use the opportunity presented by the IFRS to improve their business processes in all ramifications so as to promote uniformity and transparency.

Publisher

Macrothink Institute, Inc.

Cited by 4 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. The impact of mandatory adoption of IFRS in Saudi Arabia;Journal of International Accounting, Auditing and Taxation;2022-12

2. IFRS for SMEs adoption, corporate governance, and quality of financial statements: evidence from Dominican Republic and El Salvador;Journal of Accounting in Emerging Economies;2022-11-24

3. Financial Impact of IFRS on Indian Telecommunication Sector;2022 International Conference on Innovation and Intelligence for Informatics, Computing, and Technologies (3ICT);2022-11-20

4. IFRS adoption, corporate governance and faithful representation of financial reporting quality in Nigeria’s development banks;Cogent Business & Management;2022-11-11

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