Effect of the Adoption of International Financial Reporting Standard (IFRS) on Financial Performance: Empirical Evidence from Banks Quoted on the Nigeria Stock Exchange

Research Journal of Financial Sustainability Reporting (2016)

19 Pages Posted: 28 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: June 28, 2016

Abstract

The aim of this study is to determine the effect of adoption of International Financial Reporting Standard (IFRS) on the financial performance of banks in order to produce a more comparable, transparent and reliable financial statement. This study therefore, examines the effect of adoption of IFRS on the financial performance of Nigerian companies-evidence from Nigeria banking sector. The ex-post facto research design was adopted for this study. Mainly secondary data was used. Three hypotheses were formulated and tested in the course of this study. The statistical tool used to test the hypotheses was paired t-test statistic. It revealed that adoption of IFRS has significant effect on the profitability banks, and that IFRS has improved investors’ confidence in the financial statement. It was concluded that IFRS has positive impact on the reported net income and equity of banks, and on their profitability. It was recommended that government and regulatory authorities should organize more quality training to get bankers informed.

Keywords: International Financial Reporting Standard, Financial Performance, Profitability, Equity

JEL Classification: M23, M37, M54

Suggested Citation

Amahalu, Nestor and Beatrice, Ezechukwu, Effect of the Adoption of International Financial Reporting Standard (IFRS) on Financial Performance: Empirical Evidence from Banks Quoted on the Nigeria Stock Exchange (June 28, 2016). Research Journal of Financial Sustainability Reporting (2016). Available at SSRN: https://ssrn.com/abstract=3008649

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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