Adoption of International Financial Reporting Standards and the Changing Accounting Environment in Nigeria

Adoption of International Financial Reporting Standards and the Changing Accounting Environment in Nigeria

Abdulkadir Madawaki (Katsina University, Nigeria)
DOI: 10.4018/978-1-4666-9876-5.ch001
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The purpose of this chapter is to examine the major differences between Nigerian financial reporting rules and International Financial Reporting Standards (IFRS) following Nigeria's accounting reporting convergence to IFRS. The chapter documented evidence of differences between Nigerian Statement of Accounting Standards (NSAS), Companies and Allied Matters Act, 1990, Nigerian tax rules and IFRS requirements. It also discusses the IFRS adoption process in Nigeria and the benefits Nigeria stand to gain in adopting IFRS. The chapter discusses the challenges that might be encountered in the process of adoption of IFRS in Nigeria. Finally, the chapter provides recommendations through which these challenges can be addressed and suggest ways for further IFRS adoption research in Nigeria.
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Literature Review

The impact of financial reporting is commonly debated in relation to economic consequence: a notion introduced by (Zeff, 1978) as the impact of accounting information on decision making behavior of investors, creditors, government and businesses. Similarly, Leftwitch (1983), viewed accounting as having economic repercussion if changes in the accounting standards have any effect on firm’s values and on wealth of those who make decisions based on accounting information. The constituent of these definitions is that accounting information can influence the decisions made by investors, creditors, government and businesses. However, the economic consequence may be intended and unintended if they can or cannot reconcile with the International Accounting Standards stated objectives (Bruggemann, et al., 2013). Mandatory adoption of IFRS around the world has stimulated research that investigates the financial reporting effects; capital market effects; macroeconomic effects and tax reporting effects associated with an accounting regime change. These studies differ in their analysis, jurisdictional setting and research design and they report varying findings. In this section, a review of such studies is provided

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