Assessment of Compliance to Accounting Standards on Extraordinary Items and Prior Year Adjustments by Quoted Companies in Nigeria

Posted: 14 Jul 2008

Date Written: June 24, 2005

Abstract

This paper seeks to determine the level of compliance of Nigerian banks to the requirements of Statement of Accounting Standard No 6 (Extraordinary Items and Prior Year Adjustments) issued by the Nigerian Accounting Standards Board (NASB) to harmonise how income and expenses from unusual transaction are treated in the financial statements using randomly selected banks. Annual reports of those banks are obtained and analyzed. The tools of analysis employed include Averages and overall Compliance indices. Of the ten requirements used in the study, three banks fully applied all of them while the three other requirements were breached by two banks. In overall Compliance indices of 0.94 are found. The indices though acceptable cannot be said to mean full compliance. the paper therefore, recommends that regulatory authorities should intensify efforts towards enhancing the ability of the firms to conform with the reporting requirements. This will certainly go along way in fostering better financial reporting Nigerian firms.

Suggested Citation

Tanko, Professor Muhammad, Assessment of Compliance to Accounting Standards on Extraordinary Items and Prior Year Adjustments by Quoted Companies in Nigeria (June 24, 2005). Available at SSRN: https://ssrn.com/abstract=1150934

Professor Muhammad Tanko (Contact Author)

Kaduna State University ( email )

Tafawa Balewa Way
P. M. B. 2339
Kaduna State
Nigeria

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