Effects of International Financial Reporting Standards on Corporate Performance of Selected Banks Listed on Nigeria Stock Exchange
ELOSIUBA, J.N. & OKOYE, E.I (2018). Effects of International Financial Reporting Standards on Corporate Performance of Selected Banks Listed on Nigeria Stock Exchange. Annals of Spiru Haret University Economic Series. 19(1)
28 Pages Posted: 2 May 2018
Date Written: March 15, 2018
In the light of globalisation, where foreign investments have become trendy, comparability of financial reports of Nigerian firms and those of other firms across the world has become a concern. Nigerian firms have been mandated to adopt the International Financial Reporting Standards (IFRS) in their financial reporting. This study has examined the effect of the IFRS adoption on the reported performance of Nigerian banks listed on the Nigerian Stock Exchange. Eight (8) out of the fourteen (14) quoted banks were selected for the study. The four indices of performance employed in the study are profitability using the return on equity, liquidity using total deposit to total loan, loan grants and then market value measured by price earnings ratio for the period (2011 and 2012). 2011 represented GAAP era while 2012 stands for IFRS adoption. A comparability index for the banks was computed using the Excel Spreadsheet for each of the banks on each variable. Then the One Sample Test was employed for the analyses. The mean was used to answer the research question while the t-statistics tested the hypotheses. The results showed that mean values for profitability, liquidity and market value are greater in the GAAP era (2011) than in the IFRS period (2012), while loan grant was higher for the IFRS period (2012). The t-tested indicated the fact that none of the variables had significant effect. Thus, the study concluded that IFRS adopted does not have significant effect on bank performance reported in 2011 and 2012. The use of IFRS for all firms, as well as incorporation of IFRS guideline in professional training are recommended by this study.
Keywords: International Financial Reporting Standards (IFRS); Generally Accepted Accounting Practice (GAAP); Corporate Performance; Nigeria
JEL Classification: M40
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