Effect of International Financial Reporting Standards Adoption on Cost of Equity Capital of Banks Quoted on Nigeria Stock Exchange

Research Journal of Financial Sustainability Reporting, July-December 2016

12 Pages Posted: 27 Jul 2017 Last revised: 10 Sep 2017

See all articles by Nestor Amahalu

Nestor Amahalu

Nnamdi Azikiwe University - Department of Accountancy

Ezechukwu Beatrice

Federal Polytechnic, Oko

Date Written: December 7, 2016

Abstract

This study was carried out to ascertain the effect of International Financial Reporting Standards adoption on cost of equity capital of Nigerian banks with a focus on fifteen (15) banks quoted on the Nigeria Stock Exchange. The study made use of secondary sources of data obtained from the annual report and accounts of the selected banks under study. The relevant data were subjected to statistical analysis with the use of ANOVA and multiple regression techniques. The results of the study revealed that there is a positive and significance relationship between IFRS adoption and cost of equity capital. It was also empirically verified that the adoption of IFRS by companies would help in investment decisions of management. The researchers recommended that financial regulatory bodies such as International Accounting Standard Board (IABS) Financial Reporting Council of Nigeria (FRCN), Nigeria Stock Exchange (NSE), Stock Exchange Commission (SEC) et cetera, should enact policies that would regulate the trading activities of companies in order to ensure transparency of their operations.

Keywords: International Financial Reporting Standards, Equity Capital, Earning per Share, Cost of Equity

JEL Classification: M40, M51, L15

Suggested Citation

Amahalu, Nestor and Beatrice, Ezechukwu, Effect of International Financial Reporting Standards Adoption on Cost of Equity Capital of Banks Quoted on Nigeria Stock Exchange (December 7, 2016). Research Journal of Financial Sustainability Reporting, July-December 2016. Available at SSRN: https://ssrn.com/abstract=3008167

Nestor Amahalu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria
+2348063393668 (Phone)

Ezechukwu Beatrice

Federal Polytechnic, Oko ( email )

PMB 021 Aguata
Anambra +234
Nigeria
08033887708 (Phone)

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