Accounting Standards And Their Impact On Accounting Practice In Nigeria
At the centre of the plethora of corporate scandals that have plagued corporate entities are fraudulent financial reporting practices. Against this backdrop, proponents of the International Financial Reporting Standards (IFRS) have more strongly argued for the internationalisation of the adoption of the standards, as a panacea for curbing or mitigating these financial reporting infractions. Ranging from increased comparability to better decision making, the importance of IFRS cannot be over emphasised. It is to this end that this study evaluates the impact of IFRS on Financial Reporting Practices with focus on the Nigerian Banking Sector. The specific objective of this paper is to determine whether the quantitative differences in the financial reports prepared by Nigerian listed banks under NGAAP and IAS/IFRS are statistically significant or not. Secondary data were employed in this study. These data were gleaned from the annual reports of fourteen Nigerian listed banks. One hypothesis was developed and tested at five (5) per cent level of significance. Findings revealed that the quantitative differences in the financial reports prepared under NGAAP and IAS/IFRS are statistically significant. The study therefore concludes that IFRS have impacted on financial reporting in the Nigerian Banking sector
1.1 Background of the Study
Accounting standard can be regarded as the type of accounting prepared which: follow a laid down rife. It usually demands minimum level of disclosure and lay down principles which enable the accountant to specify the account prepared clearly and male a nice report based on the account prepared.
Again, accounting standard in line; with the financial statement which is usually prepared annually and enable the company to know their profit and loss account. The essence of adopting such standard is to enable the accountant to know the principles of account very well and known that the account is crediting and debiting.
Accounting standard could be regarded as the balance sheet, profit and loss account value added taxes financial statement are prepared to summarize the end result of all the business activities of an enterprises during the social economic political and technological environment.
Accounting standard being the routes which regulated the manner which business’ of registered companies must be reported to the public. And again incorporate financial statement are to be adopted by the management In the . preparation of the financial statement such as balance sheet, income statement etc which the accountant/ auditor can stand and make a report which based on the financial statement of the company. It is the fundamental to the understanding and interpretation of financial statement. The accounting standard assets the user of accounting information to understand by prompting improvement in the quality of the information disclosure in financial accounting standard.
1.2 Statement of the Problems
This study in tends to look at the accounting standard and their impact on accounting practices in Nigeria. The accounting standards in Nigeria are expected to exposed to risk/problems which affects its effective performance unable to ascertain their financial position of the company.
1.3 Objective of the Study
- To determine whether poor management affects the user of financial statements such as accountants investors bankers.
- To handout whether investor analyze the financial statement before making investment decision.
- To know the need of preparing the financial statement of the company.
- To make a recommendation based on the finding.
1.4 Research Question
- Do the poor management affects the compares performance in terms of maintaining the accounting standard?
- Do investors carryout the analysis of the financial statement before making investment decision?
- Is there any need for the preparation of the financial statement?
Hypothesis IS a kind of questing thoughts formulated by. the researcher in line with research question. It is classified as follows.
Positive and negative hypothesis positive hypothesis means yes (Alternative) white negative hypothesis means no (null).
- Ho: Poor management does not affect the companies performance in terms of accounting standard.
- HI: Poor management affects the companies performance in terms of accounting standard.
- Ho: Financial statement do not show the financial position of the company.
- HI: Financial statement show the financial position of the company.
1.6 Significance of the Study
This study centre on the important or benefit the researcher derived from this research work. And again, it is known that the financial statement is very essential because it will help the company to know the detailed about their company in terms of financial statement.
Accounting is the process of analyze interpretation and communicating of financial statement to the users of accounting standard. Thus, the financial standards of the company which enable the organization to know to guide the management on how to make use of resource in producing goods and services. It also helps company to analyzed and interpret their financial statement properly.
This study is intended to provide a guide to the interested to provide guide to the interested parties such as investor’s management creditors.
Finally, this study enable the accounting users to maintain the accounting standard in order to know their actual result.
1.7 Scope and Limitation of the Study
The research has covered a financial institution united bank of Africa (UBA) which has its branches of Okpara Avenue, Agbani Road and Kenyetta with specific emphasis of the accounting standard and its impact on the practice in Nigeria and the limitations of the study is that the time given to the researcher to carry out this study was not enough.
Secondly, the method used in collecting data for this research was expensive, the cost of internet materials which was the’ major source of collecting data for this research has gone so high that the researcher had not gotten limited materials for the research.
1.8 Definition of Terms
Is the process of identifying recoding communication, summarizing and interpretation of financial statement which undergoes a serous of lack down to an economic effect.
This refers as a data that are found in financial statement of the firm.
These are rutes which governed the manner of accounting in which specific business transaction of registered company must be reported to the public.
Is a statement of accounting which consists of balance sheet profit and loss accounts and income statement.
Nigeria Accounting Standard Boards which known as financial reporting council of Nigeria is the site board established on 9th September 1992 which is responsible for the issuance of accounting standard.
Is the act of recording business transaction In terms of money between an individual.
Is a special journal and also book of original entries where all cash receipt and payment are records to other book of accounting.
Is a statement that shows the assets and liabilities of the trader.
Is the entire process of planning the expenditure whose return are expected to extend beyond a short duration.
Net present value is one of the discount factor that is simplicity recognizes the time value of money.
Accounting Rate of return is the ratio of an average annual profit after tax and the total amount of average investment of a project. It is known as return on investment.
Payback period is the length of time required to recoup/recover the initial cash out flow of a project.
Conclusion and Recommendations
The importance of international financial reporting standards to financial reporting practice cannot be over emphasized. Members of the international community are interested in financial reports that have been prepared on the basis of IAS/IFRS, thereby help in attracting foreign direct investments. Other benefits derivable from the adoption of IFRS include: imposition of a more comprehensive and highly detailed set of disclosure requirements than domestic accounting standards; constrain managerial discretion, improvement in accounting quality, which in turn contributes to a generally transparent firm information environment and better accounting practice. Improved comparability is also one of the value-adding characteristics of IFRS as contended by most financial reporting pundits, as it will make it less costly for investors to compare and evaluate firms inside and outside industries and countries.
There are however some arguments against why IFRS adoption may not have a beneficially meaningful impact on financial markets, financial institutions, investors and other users of accounting information. First, financial reporting is shaped by incentives. Incentives, in turn, are influenced by the institutional structures in place. For instance, a strong investor protection regime supports a higher level of financial development with deep and liquid equity and debt markets. In such an environment, firms are not unwilling to provide greater information since it allows them to access lower cost external financing. Based on the above findings, this study concludes that IFRS has impacted on the financial reporting practices in the Nigeria Banking sector.
In order to deepen transparent financial reporting practices in the Nigerian Banking sector, sequel to the adoption of IFRS, this study offers the following recommendations:
- Strengthen the financial reporting institutional framework by further empowering the Financial Reporting Council of Nigeria. In this regard, the paper argues that one way of invigorating and empowering the Council is by making it self-sufficient in terms of funding. This will surely engender financial autonomy on the part of this regulator and avoid a situation where the regulator gets its finances from the entities it is suppose to regulate, as it was the case during the era of the defunct Nigerian Accounting Standard Board (NASB).
- Membership of the Financial Reporting Council should be widened in order to increase its influence beyond the financial sector of the Nigerian economy.
- The Financial Reporting Council in conjunction with various professional bodies should place more premium on continuing professional education and training. As much as possible, the professional accountancy bodies should align their continuing professional education requirements with IFAC guidelines.
How To Get The Complete Material For Accounting Standards And Their Impact On Accounting Practice In Nigeria
The Complete Material will be Sent to You in Just 2 Steps
Quick & Simple…
Make a Mobile Transfer or POS Payment of ₦3,000 to any of the Account Below
|Acc No: 0811003731|
|Acc No: 1225513212|
Or CLICK HERE To Pay With Debit Card
|FOR CLIENTS OUTSIDE NIGERIA|
|CLICK HERE To Pay With Debit Card ($15)|
|GHANA – Make Payment of 80 GHS to MTN MoMo, 0553978005, Douglas Osabutey|
Send the Following Details on WhatsApp ( 08143831497) After Payment
- Payment Details
- Email Address
- Accounting Standards And Their Impact On Accounting Practice In Nigeria
The Complete Material Will Be Sent To Your Email Address After Receiving Your Details
T & C Apply
This research material “Accounting Standards And Their Impact On Accounting Practice In Nigeria” is for research purposes and should be used as a guide in developing your research project / seminar work. For no reason should you copy word for word (verbatim) as samphina.com.ng will not be liable for any who copied the material.
The aim of providing this material is to reduce the stress of moving from one school library to another all in the name of searching for research materials. This service is legal because, all institutions permit their students to read previous projects, books, articles or papers while developing their own works. According to Austin Kleon “All creative work builds on what came before”.
samphina.com.ng is only providing this material “Accounting Standards And Their Impact On Accounting Practice In Nigeria” as a reference for your research. The paper should be used as a guide or framework for your own paper. The contents of this paper should be able to help you in generating new ideas and thoughts for your own research. Use it as a guidance purpose only.