The study focuses on the quality process of International Financial Reporting Standard (IFRS) on a developing economy, with particular reference to Nigeria. The research work is based on the data obtained from literature survey and archival sources in the context of the globalization of International Financial Reporting and the quality of International Financial Reporting Standards (IFRS). The primary source of data collection which consists of personal interview and questionnaire were used in gathering data from respondents. It was found that Nigeria has embraced IFRS in order to participate in the benefits it offers, including attracting foreign direct investment, reduction of the cost of doing business, and cross border listing. It was concluded that implementing IFRS Nigeria will face challenges including the development of a legal and regulatory framework, awareness campaign, and training of personnel. It was recommended among others that Nigeria should have their own version of IFRS if they can not adopt IFRS in full just as Argentina and England.


Title Page                                                                         i

Certification                                                             ii

Dedication                                                               iii

Acknowledgments                                                    iv

Abstract                                                                   v

Table of Contents                                                     vi

Chapter One: Introduction                                    1

1.1   Background to the Study                                                 1

1.2   Statement of Problem                                              4

1.3   Research Questions                                                         4

1.4   Objectives of the Study                                            5

1.5   Statement of Hypotheses                                         5

1.6   Significance of the Study                                                 6

1.7   Scope of the Study                                                   7

1.8   Limitations of the Study                                          7

1.9   Definition of Terms                                                  8

Chapter Two: Review of Related Literature          10

2.1      Introduction                                                             10

2.2      Voluntary IFRS Adoption and Accounting Quality   12

2.3      Mandatory IFRS Adoption and Accounting Quality 15

2.4      Institutional Setting and Hypothesis Development 17

2.5      Development of Accounting Profession in Nigeria    27

2.6      Legal and Regulatory Framework of Accounting in Nigeria                                                                      29

2.7      Key Differences Between NG-GASSP and IFRS                30

2.8      IFRS Qui1ity Process in Nigeria                               31

2.9      How Adoption of IFRS will Impact IT Systems in

Nigeria                                                                     32

2.10  Quality Statement                                                    41

2.11  Benefits of Adopting IFRS in Nigeria                                44

2.12  Challenges to IFRS Quality in Nigeria                      46

Chapter Three: Research Method and Design       51

3.1   Introduction                                                             51

3.2   Research design                                                       51

3.3   Description of the Population of the Study                      51

3.4   Sample Size                                                             52

3.5   Sampling Techniques                                              52

3.6   Method of Data Collection                                       53

3.7   Method of data Presentation                                    53

3.8   Method of Data Analysis                                          54

Chapter Four: Data Presentation, Analysis         

and Interpretation                                                55

4.1   Introduction                                                             55

4.2   Presentation of Data                                                56

4.3   Data Analysis                                                           58

4.4   Hypothesis Testing                                                 64

Chapter Five: Summary of Findings, Conclusion

and Recommendations                                          68

5.1   Introduction                                                             68

5.2   Summary of Findings                                              69

5.3   Conclusion                                                              69

5.4   Recommendation                                                     70

References                                                               72

Appendix I                                                               78

Appendix II                                                              79



1.1      Background to the Study

There are currently two main Schools of thought in the debate on International Financial Reporting Standards (IFRS) and accounting harmonization or convergence. The proponents argue that a single global set of accounting standards helps reduce information asymmetry, lowers the cost of capital, and increases capital flow across borders. The opponents argue that the characteristics of local business environments and institutional frameworks determine the form and contents of accounting standards. Thus, accounting standards in two countries need not be the same and the use of IFRS does not necessarily improve accounting quality (Khan & Mayes, 2009). Since more and more firms and countries have adopted IFRS or considered replacing their national standards with IFRS, in pace with the rapid development of economic globalization and the worldwide integration of capital markets since the 1990s, it is the right time to evaluate the impact of IFRS on accounting quality for the early adopters (firms and Countries) of IFRS.

With the collapse of US Energy giant (Enron), WorldCom, etc. the accounting profession came under sharp scrutiny. This led a disturbed and bewildered global public, questioning the accountant’s competence, integrity and the existence of standards in corporate governance. Countries that hitherto believed accounting standards were impermeable found out that to realize the full gains of cross border listing; no individual country can act alone in its financial reporting standards.

Convergence gives IFRS standards an authority and credibility that cannot be equated by any other set of standards. There is growing evidence that the world economics are more interconnected and symbiotic than anyone can really understand. Judging from the global financial crisis, ii is obvious that nations that are truly desirous of moving forward are now aiming to flee their countries from the limits of the present system of financial reporting standards.

Adams (2006) noted that Nigeria is part of’ this globalization, in recent times a number of Nigerian companies have raised capital form international stock markets; others have established significant presence in other jurisdictions. Also, a good number of Nigerian entities hold the securities of non-Nigerian issuers.

Therefore, for a better understanding and appreciation of the risks and, consequently, making decisions about the flow of’ economic capital, it makes sense that financial statements prepared in Nigeria use global financial reporting benchmarks. With these facts, the Federal Executive Council accepted the recommendation of the Committee on the Roadmap to the Adoption of IFRS in Nigeria that it will be in the interest of the Nigerian economy for reporting entities in Nigeria to adopt globally accepted, high- quality accounting standards by fully converging Nigerian a National Accounting Standards with International Financial Reporting Standards (IFRS) (Blondal, 2004).



1.2      Statement of Problem

This study is undertaken to examine the IFRS among accountants in Nigeria. For the purpose of this research study problem will be put in question frame. These are some of the research questions the study seeks to fine answers to:

1.     Is it difficult to access IFRS with capital flow across border?

2.     Is IFRS important to Nigeria economy?

3.     Is Nigeria accountant aware of the IFRS?  

1.3      Research Questions

In order to achieve the aim of this study the following questions require an answer;

1.     Will the adoption of IFRS enhance efficiency of financial reporting in Public Sector?

2.     Is there any relationship between capital flow across borders and IFRS?

3.     Is there any relationship between IFRS and financial report in Nigeria Economy?

4.     Does Nigeria financial report has any knowledge of IFRS?

1.4      Objectives of the Study

The following are the objective of the study

1.     To find out if the adoption of IFRS will enhance efficiency of financial reporting in Public Sector.

2.     To ascertain if there is any relationship between capital flow across borders and IFRS.

3.     To ascertain if there is any relationship between IFRS and financial report in Nigeria Economy?

4.     To find out if Nigeria financial report has any knowledge of IFRS.

1.5      Statement of Hypotheses

Hypothesis is a tentative conjectural state of relationship between two or more variable. Dankwambo (2009) transition to IPSAS and their impact on transparency it is often state the relationship between independent and dependent variables. The following are hypotheses (null hypothesis and alternative hypothesis) of the study: 

Hypothesis One

HO:   Adoption of IFRS does not enhance efficiency of financial reporting in the public sector.

HI:    Adoption of IFRS enhances efficiency of financial reporting in the public sector.  

Hypothesis Two

HO:   There is no relationship between capital flow across borders and IFRS.

HI:    There is a relationship between capital flow across borders and IFRS

Hypothesis Three

HO:   There is no relationship between IFRS and financial report in Nigeria economy

HI:    There is relationship between IFRS and financial reporting in Nigeria economy

Hypothesis Four

HO:   Nigeria financial report has no knowledge of IFRS

HI:    Nigeria financial report has knowledge of IFRS

1.6      Significance of the Study

The study will place emphasis on the importance of IFRS in accounting quality as a basis for preparation of financial statement in Nigeria. The following will benefit from the study

1.          The study will enlighten accountants on the latest development in accounting profession.

2.          The study will attract potential investors to the company.  

3.          The study will also enable Nigeria Accounting standard Board (NASB) to adjust to international standard.
The students, supervisor, government, and the general public will also benefit from it.

1.7      Scope of the Study

The study critically examines the influence of International Financial Reporting Standards (IFRS) on financial reporting quality in Nigeria, the study has a limited scope because to look at quality of IFRSs amongst accountants in Nigeria. The time is framed between 2008 and 2015 and a large sample size of 216 was used during the course of the research for effectiveness.    

1.8      Limitations of the Study

Studies of this nature are bound to be limited by constraints in the course of the finding. The followings were encountered.

1.     Data collection: Well established data are not easily available.

2.     Sizeable quantity of information obtained from papers were in organization and sometimes complex.

3.     Reluctance of the respondent to fill the questionnaires.

1.9      Definition of Terms

Accrual Accounting: Accrual Accounting is an accounting methodology under which transactions are recognized as the underlying economic events occurs, regardless of the timing of the related cash receipts and payments (Khan and Mayes, 2009). Following this methodology, revenue is recognized when income is earned, and expenses are recognized when liabilities are incurred or resource consumed. Accrual bases accounting match’s revenues to the time period in which they are incurred, Blondal (2004). While it is more complex than cash basis accounting, this contrast with the cash accounting basis under which revenues and expenditures are recognized when cash is received and paid respectively.

Accounting system: The transition to IFRS may require an entity to undertake significant changes to their core financial systems. The extent of these changes will depend on the current financial systems adopted by entities. Significant changes in systems may lead to an increased risk in the reliability of information produced from the systems.

Quality statement: It is in the best interest of the nation to adopt the IFRS. The transition should be phased so that the objectives are achieved within the time-frame as outlined in the roadmap.

IFRS: IFRS a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements

Accounting Quality: The objective of financial reporting is to provide information about financial position, performance and changes in financial position of an entity that is useful in making economic decisions for a wide range of users, such as investors, employees, lenders, suppliers government and public in general.


Order Complete Project