IFRS Adoption and Information Quality: Evidence from Emerging Market

Rad, Seyed Sajad Ebrahimi; Embong, Zaini

doi:10.17576/ajag-2014-5-03

Cited by 3 publications

(1 citation statement)

References 42 publications

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“…Lastly, the most important variable of interest that is expected to capture any incremental change in credit relevance quality for mandatory IFRS adopting banks is MANDATORY*POST, which is the interaction term in the model. However, prior studies (Alsaqqa and Sawan, 2013;Barth et al, 2008;Beest et al, 2009;Blanchette et al, 2012;Chen et al, 2015;den Besten et al, 2015;Doukakis, 2014;Ebrahimi Rad and Embong, 2014;Iyoha, 2011;Jeroh and Okoro, 2016;Mohammed and Lode, 2015;Okpala, 2012;Omokhudu and Ibadin, 2015;Onalo et al, 2014aOnalo et al, , 2014bSaidu and Dauda, 2014;Sarea and Al Nesuf, 2013;Tanko, 2012) document that credit relevance is affected by factors such as return on equity (ROE), revenue (REV), deposit liabilities (DEP), loan loss provision (LLP), bank size (SIZE), leverage (LEV), interest coverage (COV), big 4 auditing firms (BIG4), going concern statement, (GOING) and foreign direct investment (FDI). These factors are the financial and non-financial control variables, which are firm-and country-level attributes to be included in the models.…”

Section: Research Design and Methodologymentioning

confidence: 99%

Credit relevance after mandatory IFRS adoption in deposit money banks of Nigeria

Dang¹,

Akwe²,

Garba³

2020

AJAR

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PurposeCredit relevance of financial reporting can be influenced by change in financial reporting framework. This study aims to examine the effect of mandatory international financial reporting standards (IFRS) adoption on credit relevance quality of financial reporting of deposit money banks (DMBs) in Nigeria.Design/methodology/approachThis study uses difference-in-differences (D-in-D) design for its modelling. Panel data regression analysis based on the D-in-D model is used in analysing the data collected from secondary sources.FindingsThe findings of this study are that based on the D-in-D approach, there is a significant and positive effect of mandatory IFRS adoption on credit relevance quality of financial reporting of DMBs in Nigeria, and that there is also a significant difference in the credit relevance quality of financial reporting of mandatory adopting banks in the post-mandatory IFRS adoption period compared to pre-mandatory IFRS adoption period.Research limitations/implicationsTo the best of this study's review, there is inadequacy of literature within the credit relevance research in Nigeria. In the light of this, this study intends to fill the gap.Practical implicationsThis study is specifically important to regulatory authorities, both primary and secondary regulators. Specifically, this study has implications in the regulatory roles of Central Bank of Nigeria (CBN) and Financial Reporting Council of Nigeria (FRC). However, the study recommends that regulatory authorities should encourage DMBs to avail their financial reports annually to credit rating agencies (local and international) for proper evaluation for subsequent ratings.Originality/valueThe peculiarities in this study, that is the utilisation of the D-in-D design and the use of credit relevance metric as the dependent variable, made this study important and novel to push the frontier of existing knowledge.

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