The Adoption And Implementation Of International Financial Reporting Standard (Ifrs) Issues And Challenges On Nigeria Economy
Abstract
This exploration work named relinquishment and perpetration of International Financial Reporting Standard( IFRS) Issues and challenges on the Nigeria frugality. The experimenter examined the relationship between IFRS Adoption and gross domestic product of Nigeria. estimated the effect of IFRS exposure demand on the public income of Nigeria. Determine the impact of IFRS Adoption on the total profit of Nigeria. Data for the study was sourced through CBN Annual report and journal papers related to the subjects matter. The data collected was anatomized using SPSS. The results of the study shows that the advised t- statistics( t = 3.836) for GDP is lesser than tabulated t- statistics at0.05 position of significance. The retrogression equation also revealed that IFRS relinquishment reckoned for6.023 units for every increase in Nigerian GDP. The measure of determinant( R2)0.993 indicating that 99 of variation in Nigerian GDP increase is caused by variation IFRS relinquishment. The relationship between IFRS Adoption and gross domestic product of Nigeria is high, positive and statistically significant at0.05 position( r = 0.996, p<0.05). The overall retrogression model is statistically significant in terms of its overall virtuousness of fit( f = 45.945, p<0.05). As a result of this the study accepts the indispensable thesis meaning that there’s significant relationship between IFRS Adoption and gross domestic product of Nigeria. Companies should prepare adequately on all fronts for the perpetration of IFRS. Companies should endeavour to use the occasion presented by the relinquishment of IFRS to ameliorate their business process and procedures. Companies that are needed to borrow IFRS should also be involved in capacity structure by organizing conferences and forums for members and staff of the company on IFRS. Nigeria’s relinquishment of IFRS should be supported as a matter of urgency to enable full attainment of the country’s profitable eventuality. As the time table for the relinquishment of IFRS in Nigeria has been determined, the need to duly rethink the conditioning of the major institutions connected with the perpetration of the new standard should be urgently considered.
Chapter One
Preface
Background of the Study
The relinquishment of International Financial Reporting norms( IFRS) in Europe and around the world represents maybe the most important account nonsupervisory change in recent time. The use of IFRS as a universal fiscal reporting language in gaining instigation across the globe as further countries are espousing IFRS or clustering their original norms with it.
Globalization of capital request is an unrecoverable process and there are numerous implicit benefits to be gained from mutually recognised and searched transnational account norms. The move towards developing an respectable global high quality fiscal reporting norms started in 1973 when the International Accounting norms Committee( IASC) was formed by professional account bodies from Canada, United States of America, United Kingdom, Germany, France etc. The IASC was to formulate livery and global account norms aimed at reducing the disagreement in transnational account principles and reporting practice. In this light the IASC was established and has laboriously been backing the uniformity and standardization of counting principles for over two decades Carson in Madawaki( 2012; 152). In April 2001, the IASC was reorganized into International Accounting norms Boards( IASB). Thenceforward, the IASB has streamlined the formerly being transnational account norms and appertained to them as IFRS.
IFRS are a single set of high quality accessible norms for general purpose of fiscal reporting which are principles grounded in discrepancy to the rules grounded approach.
In Nigeria, relinquishment of IFRS was launched in September, 2010 by the honourable Minister, Federal Ministry of Commerce and Industry, Senator Jubril Martins – Kuye( OFR). The relinquishment was organised similar that all stakeholders use the IFRS by January 2014. The relinquishment was listed to start with public listed realities and significant public interest realities who are anticipated to borrow the IFRS for statutory purposes by January 2013 and small and medium – sized realities shall mandatorily borrow IFRS by January 2014, JubrilM.K and Michael, P( 2010).
The time 2012 pronounced significant water chalet in Nigeria’s fiscal reporting as the country wholly adopts transnational Financial Reporting norms( IFRS) as its fiscal reporting frame with effect from January 1st, 2012. In line with recommendations of the commission on the Roadmap for the relinquishment of IFRS in Nigeria which were accepted by the government and officially unveiled on September 2nd, 2010 at Transcorp Hilton Hotel, Abuja, as listed companies and significant public interest realities in Nigeria must borrow IFRS by January 1st, 2013 while small and medium- sized Enterprises( SMEs) will key into the action by January 1st, 2014. By recrimination, all SMEs will statutorily be needed to issue IFRS grounded fiscal statements for the time ending 31st December, 2014. realities that don’t meet the IFRS criteria for SMEs shall prepare and issue their report using SMEs Guidelines on Account( ie Tier 3 or Micro-GAAP) issued by the GENEVA- grounded united nations conference on Trade and development( UNCTAD)( Asein 2010).
The public sector, the principal motorist of the nation’s profitable conditioning will also borrow transnational public sector Accounting norms( IPSAS) fromJan. 1st, 2013. The detention in the sector inception is explained fact that will have first former conveyance from current cash account to modified addendum account. The compliance by the sector will complete the entire trade circle. The view is replete that this strategy no dubieties, enhances Nigerian’s percept foreign investors, reduce its pitfalls and give a dependable, similar investment destinations on the mainland. The Readings is composed of Nigeria Accounting Standard Board( NASB), the institute of chartered accountants of Nigeria( ICAN), Central Bank of Nigeria( CBN), Securities and Exchange Commission( SEC) and other stakeholders in the fiscal reporting process( Mackenzio Bruce et al( 2011). According to NASB( 2010), the civil government of Nigeria responded to numerous significant account and reporting crunches and departures from morals passed unnoticed by the promulgation of the Nigeria Accounting Standard Board( NASB) inspectorate unit as a better interpretation of an evolutionary blessing by the government to strengthen compliance with account norms and to enhance reliance. Added to this, the Nigerian government introduced major reforms aimed at promoting confidence in commercial reporting and governance. The pursuit of these reform authorizations gave rise to similar measures in government as the fesh- oning of the financial responsibility bill, perpetration of the new oil painting and has unit, parastatatal support unit, the setting up of profitable and fiscal Crimes Commission( EFCC), the Independence and Corrupt Practices Commission( ICPC) and the Nigeria extractive diligence translucency enterprise. It also attracted development mates collaboration flag liaisons similar as the World Bank group and Department for International Development( DPID).
In the midst of these developments, it becomes clear that the Nigerian government demanded to engage in wide ranging views that fete commercial reporting knowing sharp well that the world. husbandry are how inter connected symbiotic them every one really understand.
Judging from the global fiscal extremity, it’s egregious to all that nations have strained the present system of discriminational public fiscal norms to its limit. Nations that are truly desirous of attracting further foreign direct investment, enhancing job openings and profitable metamorphosis are now aiming to free their countries from the limits of the present system.
This requiresre-appraisal of legal frame, institutional frame, mortal capacity structure. The FRC Act 2011, assured from there-appraisal of the legal and nonsupervisory frame with regard to the fiscal reporting governance in Nigeria.
Commercial governance failures have now been proved to be at the heart of the current fiscal extremity. This is owing to the fact that commercial boards didn’t live up to their liabilities and the doorkeepers we fiscal judges and prudential controllers didn’t draw the investing public attention to systemic pitfalls. The result to all these is the internalization of fiscal reporting marks and hence the relinquishment of transnational fiscal Reporting norms
still, the successful relinquishment and perpetration of these norms will remain a mirage in any country including Nigeria, Madawaki( 2012) 152). In the light of this thus, this study concentrated on the process of espousing the IFRS in Nigeria as a developing frugality, the benefit and challenges of relinquishment, bearing in mind prevailing domestic legal and nonsupervisory frame work of account.
Statement of the Problem
The major problem that needed this exploration work is to examine the relinquishment and perpetration of International Financial Reporting norms( IFRS) Issues and challenges on the Nigeria frugality.
1. Lack of perpetration of IFRS in the medication of fiscal statement by colorful enterprises in Nigeria has led to poor relationship between IFRS Adoption and gross domestic product of Nigeria.
2. former studies has shown that there’s poor perpetration of IFRS exposure demand and this has negatively affected the public income of Nigeria.
3. Poor knowledge of the IFRS Relinquishment in Nigerian has negative impact on the total profit of Nigeria.
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