Open AccessAdoption of International Financial Reporting Standards (IFRS) and Assets Quality in the Nigerian Banking Sector: The Fundamental Effect Approach
Author(s) -
Anthony Nzeribe Nwaubani,
Cyprian Okey Okoro
Publication year - 2018
Publication title -
journal of public management research
Language(s) - English
Resource type - Journals
ISSN - 2377-3294
DOI - 10.5296/jpmr.v4i2.14098
Subject(s) - international financial reporting standards , business , accounting , stock exchange , asset quality , loan , asset (computer security) , quality (philosophy) , annual report , finance , profit (economics) , economics , capital adequacy ratio , philosophy , computer security , epistemology , computer science , microeconomics
The main purpose of this work is to examine the effect of the adoption of international financial reporting standards (IFRS) on assets quality in the Nigerian banking sector. Specifically the study sought to determine the effect of the adoption on asset quality, loan volume, , net interest income and profit after tax of deposit money banks listed on the Nigerian Stock Exchange. The adopted research design is causal-comparative. Secondary data on ten out of sixteen listed deposit money banks on the Nigerian Stock Exchange by June 2018 were used. The banks which were selected via judgmental sampling technique were those whose annual financial statements for the immediate year before IFRS adoption year were available and contained figures under Nigerian GAAP/SAS and IFRS-equivalent. The data which were analyzed using paired student t-test approach were sourced from 2011 and 2012 annual reports of the selected banks except Zenith bank for which only 2011 annual financial reports were used.. The variables of interest were grouped under Nigerian GAAP (SAS) and IFRS. Findings revealed that overall, the IFRS adoption indicates negative insignificant effect on assets quality of deposit money banks in Nigeria. The study therefore, recommends inter-alia that Financial Reporting Council of Nigeria should partner with the CBN to provide clarity on areas of regulatory hindrance to full and effective implementation of the IFRS with regular.