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
Date Written: June 28, 2016
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: Suggested Citation