Ifrs Adoption and Performance of Quoted Consumer Goods Manufacturing Companies in Nigeria

Abstract

Globalization has strengthened the need for the worldwide harmonization of accounting and financial reporting standards for the benefit of users and preparers of the financial reports. This study seeks to investigate the Adoption of International Financial Reporting Standards (IFRSs)by Nigerian Quoted Consumer goods Manufacturing Companies with the view of establishing empirically, the appropriateness or otherwise of the adoption in relation to the performance of the companies.. An ex-post-facto research design was adopted for the study. Secondary data were obtained from the audited annual financial reports of ten (10) of such manufacturing companies purposively selected from the population of manufacturing companies listed on the Nigerian stock exchange for a period of five (5) years (2010-2014). The data analysis was done using the pooled OLS estimator through the aid of Stata software version 11. The findings show that there is no significant relationship between the adoption of IFRS and performance of manufacturing firms listed on the Nigerian Stock Exchange. However, the findings of this study might have been affected by the choice of accounting policies of the companies under investigation and some environmental factors such as the economic, socio-cultural, political and legal factors. Hence, one can therefore assert that, although the adoption of IFRS is not significantly related to the performance of Nigerian Quoted Consumer goods Manufacturing Companies, extant literature established that adoption of IFRS is worthwhile in view of the fact that it enhances better accountability, comparability, transparency and as well, improves the quality of financial reporting, however, IFRS is not an end in itself but a means to an end.

IFRSs Adoption and its Influence on Financial Perfor-mance of Listed Consumer Goods Companies in Nigeria

“…Also, study Okafor and Killian (2011) in Nigeria and from the perspective of stakeholders; achieved through the use of questionnaire discovered that the benefits derivable in terms of improvement in performance of business, and its impact on other business performance are higher during IFRSs adoption era than during Generally Accepted Accounting Principles (GAAPs) era; it was therefore recommended that management should start making comprehensive plans ahead of IFRS adoption while on the other hand, findings by Agyei-Mensah(2012) did not support earlier findings by Okafor and Killian (2011). Similar study by Alu and Akinwunmi (2017) discovered that IFRS adoption has no significant relationship with performance of manufacturing firms listed on the Nigerian Stock Exchange when proxy by Return on Asset (ROA). H01: The adoption and of IFRSs has no significant effect on profitability of quoted consumer goods manufacturing firms in Nigeria.…”