Compliance with the Requirements of Accounting Standard by Quoted Companies in Nigeria

19 Pages Posted: 24 Jun 2008

See all articles by Aliyu Sulaiman Kantudu

Aliyu Sulaiman Kantudu

Bayero University - Department of Accounting

Professor Muhammad Tanko

Kaduna State University

Date Written: June 24, 2008

Abstract

This paper examines the level of compliance with the requirements of statement of Accounting Standards number 16 by Insurance Companies listed on the Nigerian Stock Exchange (NSE). The basic objective is to find out whether or not listed insurance companies in Nigeria apply the requirements of the standard relating to Accounting for Insurance Business. The population of the study is composed of all the insurance companies quoted on Nigerian Stock Exchange. The paper uses annual accounts and reports of 5 insurance companies. The technique of analysis adopted was the qualitative grading system, while the sample was selected using stratified random sampling technique of which 5 out of 19 quoted insurance companies which engage in composite insurance business were sampled. Results from the analysis shows that a gap exists between what insurance companies do and what is required of them by SAS 16, that is, compliance with the requirements of SAS 16 by listed insurance companies is good (i.e. 76.9%) and by our criterion we referred to it as compliance within the semi-strong range, which we discover to be inadequate, because accounting standards are expected to be complied with in total, that is 100% compliance. Therefore, the paper calls on the newly empowered NASB to, as a matter of urgency, organize campaigns and propaganda with sole aim of enlightening not only corporate bodies but also individual stakeholders on the advantages derivable from complying with accounting standards to intensify the relevance of the NASB Act 2003 to the insurance industry to achieve uniformity in financial reporting that meets the NASB requirements and finally to reduce the incidence of breach of the NASB Act 2003 and enhance compliance with set accounting standards.

JEL Classification: M41, M44, M47, G22

Suggested Citation

Kantudu, Prof. Aliyu Sulaiman and Tanko, Professor Muhammad, Compliance with the Requirements of Accounting Standard by Quoted Companies in Nigeria (June 24, 2008). Available at SSRN: https://ssrn.com/abstract=1150973 or http://dx.doi.org/10.2139/ssrn.1150973

Prof. Aliyu Sulaiman Kantudu

Bayero University - Department of Accounting ( email )

Kano
Nigeria

Professor Muhammad Tanko (Contact Author)

Kaduna State University ( email )

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

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