IFRS adoption and the value-relevance of financial statements figures in Nigeria (original) (raw)
Related papers
IFRS Adoption and Value Relevance of Financial Statements of Nigerian Listed Banks
International Journal of Finance and Accounting, 2015
Adopting the International Financial Reporting Standard (IFRS) have been empirically found to improve the quality of accounting in some countries, thereby increasing its usefulness to stakeholders. This study empirically examines whether the mandatory adoption of IFRS has improved the value relevance of financial information in the financial statements of commercial banks in Nigeria. The sample comprises of twelve listed banks in Nigeria. Specifically, financial statement figures of 2010 and 2011 (pre-adoption period) and 2012 and 2013 (post-adoption) were utilized. Descriptive statistics and least square regression were conducted to analyse the effect of IFRS adoption on the accounting quality. The result indicates that the equity value and earnings of banks are relatively value relevant to share prices under IFRS than under the previous Nigerian SAS. Results also indicate that earnings per share is incrementally value relevant during post-IFRS period while book value of equity per share is incrementally less value relevant during the post-IFRS period. This may imply that earnings reported by Nigerian Commercial banks have become more informative to equity investors in determining the value of banks following IFRS adoption. We therefore recommend that Financial Reporting Council of Nigeria and other accounting standards setters should incorporate more measures to enhance the quality of the financial reporting in order to increase the value relevance of financial statements.
IFRS Adoption and the Value Relevance of Accounting Information in Nigeria: An Empirical Study
Journal of Modern Accounting and Auditing, 2017
The objective of this article is to determine the effect of International Financial Reporting Standards (IFRS) adoption on value relevance of accounting information in Nigeria. The study therefore empirically analyzed the effect of IFRS adoption on value relevance of book value, earnings per share, and cash flow from operations in Nigerian firms-evidence from consumer firms sector. Three hypotheses guided the study. The ex-post facto research design was used. The population is made up of 25 consumer firms listed in Nigerian Stock Exchange. A sample size of 12 firms selected on the basis of availability of data among other considerations was used. The study covers a period of eight years (2008-2015). Secondary data collected from annual reports of firms and database of Capital Assets (http://www.capitalassets.com.ng/) were used. Multiple regression analysis was used in analyzing the data with the aid of Statistical Package for Social Sciences (SPSS) Version 22. The findings revealed that IFRS adoption has an incremental effect on the value relevance of book value, earnings per share, and cash flow from operations, with earnings per share showing the highest increment. Based on the findings, the researchers recommended that investors should consider the values of earnings, book values of equity, and cash flow from operations in the annual reports of firms prepared in accordance with IFRS before making any investment decision. However, more emphasis should be laid on earnings.
گۆڤارا زانستێن مرۆڤایەتی یا زانكۆیا زاخۆ, 2022
The study examines the effect of IFRS adoption on the value relevance of accounting information of six (6) out of thirteen (13) listed industrial goods firms in Nigeria for the period of fourteen years (2007-2020); seven (7) years before IFRS adoption and seven (7) years after IFRS adoption. Earnings per share (EPS), Book value per share (BVPS) and Dividend per share (DPS) constitute the independent variables and share price as the dependent variable. Ex-post facto research design was employed and multiple regression models as well as Ohlson (1995) price model were used to analyze the sample data. Data were collected from the published financial statement of the sample firms. The result reveal that EPS is negatively and DPS is positively associated with share price and both are significant, while BVPS is insignificantly associated with share price in the pre-IFRS era. On the other hand, EPS has negative significant association with share price, while BVPS and DPS is having a positive and significant association with share price in the post-IFRS era. Therefore, it is concluded that the value relevance of accounting information has increase after the adoption of IFRS; this is supported by the R 2 of post-IFRS (51%) which is higher than the R 2 of pre-IFRS (30%).
2017
This paper examined the impact of International Financial Reporting Standard (IFRS) adoption on the value relevance of accounting information in Nigeria. In achieving the objectives of this research, the fact book and the annual reports for the period 2010-2013 were used. Also, using the judgmental sampling technic a total of 10 companies were selected from a population of 26 listed companies in the consumer goods industry listed on the floor of the Nigerian Stock Exchange (NSE), The Ohlson model was adopted to develop six models for the course of the paper. Using ordinary least square regression, the study found out that; earnings per share (EPS) and book value of equity per share are accounting variables that jointly explains share price. The study observed that with the introduction and adoption of IFRS, there has been is an improvement in the value relevance of accounting information. The study also observed that EPS exhibits a stronger explanatory power both in pre and post IFR...
The value relevance of accounting disclosures among listed Nigerian firms: IFRS adoption
Iranian Journal of Management Studies, 2016
This study determined the value relevance of assets and liabilities after the adoption of IFRS among listed Nigerian firms. Ohlson Model (1995) model of stock price regressions tested the relationship between assets and liabilities with the stock price, which has been widely adopted by accounting researchers. A sample of 126 firms listed in Nigeria stock market is used for the study. Data is collected from Thomson Reuters and Bank Scope Data Streams for non-financial and financial firms, respectively. The findings provide empirical evidence, established on unique Nigerian environment, statistical significance difference on the value relevance of assets, and liabilities prepared and disclosed under IFRS. Robustness test, as well as yearly trend analysis, produce collaborating evidence. The significance of the study's findings presents statistical significance value relevance increase based on the unique Nigerian adoption of IFRS as an emerging market.
International Journal of Accounting & Finance Review, 2017
This study investigates the International Financial Reporting Standards (IFRS) and value relevance of financial information among Nigerian listed companies after the adoption of IFRS. 77 sample companies were randomly selected from the population. Data were collected from UUM-Data stream through the annual reports and accounts of companies, which consist of Stock price (dependent variable), Book value of equity and net income as (independent variables) for the year 2016. Ordinary Least Square Regression was the method used in analyzing the variables. The regression result revealed that there is a positive and significant relationship between book value of equity and net income on stock price. These reveal that the financial information of listed companies in Nigeria is more value relevant after the adoption of IFRS. In view of the findings, the study recommends that, Nigerian Stock Exchange should ensure that all listed companies are comply with the accounting framework issued by IF...
Value Relevance of Accounting Data in the Pre and Post IFRS Era: Evidence from Nigeria
This research examines value relevance of accounting data in the pre and post IFRS period in Nigeria. The study focuses on four year period (2008-2011) before IFRS and four year period (2012-2015) after IFRS adoption. We sampled 52 public entities from consumer goods and financial services sector in Nigeria. We measured value relevance using price regression model and returns regression model of accounting data. Our findings of price regression show an increase in adjusted R 2 between the two periods from 32% to 59% which accounts for 84% growth in adjusted R 2 while the return regression model shows an increase in adjusted R 2 between the two periods from 14% to 22% which accounts for 57% growth in adjusted R 2. This finding suggests the value relevance of accounting data is more pronounced in the post-IFRS period for the sampled firms used in this study. Our findings also reveal that IFRS implementation in Nigeria has enhanced the value relevance of accounting data such as earnings, cash flow, book value and net income. We recommend that more measures should be taken by regulatory authorities (Financial Reporting Council of Nigeria, Central Bank of Nigeria) to ensure that all public entities comply strictly with IFRS. This will enable relevant and reliable financial information to be passed to the capital market for investors to take an informed and relevant decision.
The emergencies of the globalization of accounting standards and other critical issue have been reported to reduce the cost of enhancing comparability, understandability, and producing supplementary information, and analysis of the accounting reports. This allowed many developing nations who do not want to be left behind to take a cue from the world's major economies to meet the international financial reporting standards (IFRS) that Nigeria has taken measures to converge equally. The study examines the effect of IFRS adoption on financial reporting quality of listed non-financial companies in the Nigerian stock exchange. Particularly, in the area of value relevance and timely loss recognition. The study used 63 non-financial companies' annual reports listed on the Nigerian Stock Exchange (NSE) for the period of 2008 to 2018 (i.e., 5years pre-adoption and 5years post adoption). Multiple linear regression was used in analyzing the collected data via STATA software. The result shows a significant increase in the value relevance of financial reports after IFRS adoption. The study also showed that the identification of significant losses increased in the post-IFRS adoption era. Based on the result, the study suggests that the relationship between accounting measures on IFRS adoption and financial reporting quality indicates that both foreign and local investors can predict the future of market value of individual securities. Therefore, investor receives considerable information by knowing the price information on time that shows more value relevant. Finally, this study contributed to the theory and practice, as well as direction for further studies related to the financial reporting standards and the reporting quality.
The Impact of the New Accounting Reporting Among Listed Firms in Nigerian Stock Market
The study discusses the relationship between accounting disclosures and market value under new accounting reporting. The study addresses whether accounting information has improved after the IFRS adoption among Nigerian listed firms. The study adopted Ohlson (1995) stock price model that has commonly been used in the capital market for a 5-year data of 129 companies listed in the Nigerian stock market. The Findings of the study have shown disaggregated assets and liabilities have a strong relationship with stock price. However, there is higher association after the adoption of IFRS from the adjusted R 2. Furthermore, current assets presented more explanatory power than all other variables in the model, signifying that investors rely on current assets for decision making. However, Cramer (1987) Z statistics provided no significance difference in value relevance between the two periods. A possible explanation of the changes could be that investors do not view accounting information to be different in the two periods. Therefore, policy makers, standard setters, and regulators need to come together to address the issue of IFRS adoption by firms in Nigeria.
Impact of IFRS Adoption and Value Relevance of Accounting Quality on Listed Firms in Nigeria
Jurnal Intelek
This study concentrated on evaluating the value relevance of accounting quality in Nigeria both before and after the mandatory adoption of IFRS as a reporting standard for the period of two (2) years (2011-2012) using annual reports of the whole (108) companies quoted on Nigerian stock exchange with exclusion to companies that operate in financial services sector of the market, criteria were used to arrive at the sample of 91 listed firms, Secondary data and Ordinary least Square (OLS) was engaged in analyzing the data extracted for this study, using STATA 13, Analysis was done using Pre IFRS and Post IFRS, the study discovered that value relevance of accounting quality is higher in the post-IFRS adoption period compared to that of the pre-adoption period. The study recommended that other developing nations should adopt IFRS as their financial reporting standard since it is accomplished of increasing their value relevance of accounting quality.