Achieving Transparent Ifrs Financial Reporting in Nigeria and Ghana: The B & B Model Effect

NWOYE, U.J., ADENIYI, S.I. & ABIAHU, M.C. (2020). ACHIEVING TRANSPARENT IFRS FINANCIAL REPORTING IN NIGERIA AND GHANA: THE B & B MODEL EFFECT. Journal of Taxation and Economic Development Vol. 19,(2), 34-64

31 Pages Posted: 7 Apr 2021

See all articles by Dr. Ugochukwu Nwoye

Dr. Ugochukwu Nwoye

Nnamdi Azikiwe University - Department of Accountancy, Students

Segun Adeniyi

Nnamdi Azikiwe University - Department of Accountancy

Mary-Fidelis Chidoziem Abiahu

Nnamdi Azikiwe University - Department of Accountancy

Date Written: September 30, 2020

Abstract

In Africa, the transparency quality of financial disclosures appears to rank below expectations after several years of adopting IFRS. Some scholars advocate for the deployment of multi investigative models as a complement during Financial Statements audit to help secure reasonable transparency in IFRS financial reporting. As a result, this study intends to ascertain the effectiveness of Benford’s Law in evaluating the faithful representation quality of IFRS financial disclosures of public listed companies. It also intends to determine whether Beneish Ratios are suitable complements in evaluating faithful representation quality of financial disclosures. Being casual comparative research, the 2009 - 2011 and 2012 - 2016 IFRS Annual Reports of 44 listed manufacturing companies in Ghana and Nigeria were evaluated. Analyses were executed using Benford's Law and Beneish Ratios (B & B Model), Chi-Square, Multiple Regression and Mann Whitney U test. Findings obtained showed that Benford's Law, upon proper deployment and application, is effective in evaluating the faithful representation quality of financial disclosures in IFRS based Financial Statements of public manufacturing companies in Nigeria and Ghana. Also, Beneish Ratios were observed to be suitable complements in evaluating the faithful representation of IFRS financial disclosures of these companies studied in both countries. Based on the above findings, it was concluded that expected reasonable transparency in IFRS financial reporting is not the case in Nigeria and Ghana despite both countries' compliance with IFRS.

Keywords: B & B Model, Faithful Representation Quality, IFRS Financial Disclosures, Manufacturing companies, Transparency

JEL Classification: M40, M41, M42

Suggested Citation

Nwoye, Dr. Ugochukwu and Adeniyi, Segun and Abiahu, Mary-Fidelis Chidoziem, Achieving Transparent Ifrs Financial Reporting in Nigeria and Ghana: The B & B Model Effect (September 30, 2020). NWOYE, U.J., ADENIYI, S.I. & ABIAHU, M.C. (2020). ACHIEVING TRANSPARENT IFRS FINANCIAL REPORTING IN NIGERIA AND GHANA: THE B & B MODEL EFFECT. Journal of Taxation and Economic Development Vol. 19,(2), 34-64, Available at SSRN: https://ssrn.com/abstract=3808635

Dr. Ugochukwu Nwoye

Nnamdi Azikiwe University - Department of Accountancy, Students ( email )

PMB 5025, Awka, Anambra State.
Awka
Nigeria
07032132659 (Phone)

Segun Adeniyi

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

Mary-Fidelis Chidoziem Abiahu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
8
Abstract Views
44
PlumX Metrics