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PROJECT TITLE
THE BENEFITS AND CHALLENGES OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRS) ADOPTION BY LISTED COMPANIES
(A CASE STUDY OF NIGERIA BREWERIES PLC, IBADAN).
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2
ABSTRACT
The purpose of this study is to bring out issue and concepts of international financial
reporting standard (IFRS) in general, its relationship to corporate business with
specific reference to Nigeria Brewery Pic, Ibadan. The Objective of the study is to
present the benefit of IFRS adoption and the problem of the study is the need for
harmonization of financial statements and single of consistent high quality financial
reporting standard gain wide spread acceptance amongst policies maker, standard
setter and preparer. The need for quality and uniformity in the preparation and
presentation of financial statement gave birth to (IFRS), The Directors, Board of
Governors, Managers and every" stakeholder with more effective way of analyzing and
reporting financial statement are the significance of the study. The potential benefits
that Nigeria gain after IFRS adoption is to promote the compilation of the meaningful
data on the performance of various reporting entities at public and private level in
Nigeria. Why the challenges of IFRS are the level of Awareness and Accounting
Education and Training also indicated in the study. The financial reporting regulation
and regulator jn Nigeria are corporate Affair Commission (CAC) and the Centre Bank
of Nigeria (CBN) and institute of chartered accountants of Nigeria (ICAN). The
purpose of conducting an empirical research the used interview and direct
observation are the methods of collecting data for this research work and the
necessary techniques of data collection were through primary and secondary source in
this study. The finding of this study is to analyze the data gathered from an unbiased
questionnaire drafted and circulated for the purpose of the study. From the findings,
we find out that adoption if International Financial Reporting standard has
accordingly added better and meaningful understanding to the preparation of
financial statement
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TABLE OF CONTENTS
Title Page
Certification
Dedication
Acknowledgement
Abstract
Table of content
CHAPTER ONE
1.1 Introduction
1.2 Background of the study
1.3 Statement of the problem
1.4 Objectives of the study
1.5 Research questions
1.6 Statement of Hypothesis
1.7 Scope of the study
1.8 Significance of the study
1.9 Justification of the study
1.10 Definitions of Terms
CHAPTER TWO:
2.0 Introduction
2.1 Conceptual Review
2.1.1 Development of accounting profession in Nigeria (Brief overview)
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2.1.2 Legal and regulatory framework of accounting in Nigeria
2.2 Theoretical Review
2.1 The rational utility maximization theory
2.2.2 Pure impression management model
2.3 Empirical Review
2.3.1 Benefits of adopting IFRS in Nigeria
2.3.2 Challenges to IFRS adoption in Nigeria
2.3.3 Benefits and challenges of the implementation of IFRS to economic
development
2.3.4 Requirements that will assist implementation of IFRS in Nigeria
2.4 Financial reporting regulations and regulators in Nigeria
2.4.1 Components of IFRS financial statements
2.4.2 Roadmap for the adoption of IFRS and the implications in Nigeria
2.4.3 Adoption statement of IFRS
2.4.4 Reasons for IFRS
CHAPTER THREE
3.0 Research Methodology
3.1 Introduction
3.2 Area of Study
3.3 Population of the study
3.4 Research Design
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3.5 Sample and Sampling technique
3.6 Data collection procedure
3.7 Methods of data Analysis
CHAPTER FOUR
4.0 Presentation and Analysis of Data
4.1 Analysis of questionnaire
4.2 Testing of Hypothesis
CHAPTER FIVE
5.0 Summary, Conclusion and Recommendation
5.1 Summary
5.2 Conclusion
5.3 Recommendation
References
Questionnaire
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CHAPTER ONE
1.1 INTRODUCTION
An acceptable global high international quality financial reporting standard
(IFRS) was initiated in 1973 when the international accounting standard committee
(IASC) was formed by the professional bodies from different countries (such as
United States of America, United Kingdom, Mexico, Australia, Germany. France,
Canada, Japan and Netherlands) all over the world (Garuba and Donwa, 2011). This
body was properly recognised in 2001 by the international accounting standards
board (IASB), and as well developed accounting standards and related
interpretations jointly referred to as the international financial reporting standards
(IFRS).
The supremacy of IFRS further improved in September 2002, when the
United States financial accounting standard board (FASB) and IASC under took to
work closely based on their agreement to develop high quality compatible
accounting standards that could be adopted for both domestic and cross border
financial reporting. These bodies so far achieved their objectives and are far
advanced in the IFRS - Us Generally Accepted Accounting principles (GAAP),
Convergence Although, many developing counting who do not want to be left behind
took a cue from the world major economics to either adapt, adopt or converge the
IFRS Different countries on the other hand use different approaches in adopting
IFRS based on their need and ability to adopt. (Azobi, 2010).
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As part of plans to meet international standards, the federal Government has
disclosed that new accountancy system, the international financial reporting
standard (IFRS) will (Umoru and Isreal, 2010) take off in Nigeria on 1st January,
2012. In Nigeria, the government has taken the stand to involve all state holders
including institution before it finally decided to adopt the IFRS on a gradual basis.
Accounting to Ezeokoh (2011) as cited by Ejike (2012), financial reporting system
has involved the full set of relationship between companies is board, the
management its shareholders, and other stakeholders, including institution and the
community in which it is located.
The board of directors is supposed to be accountable to shareholders in any
company for effective monitoring hence there must be an independent relationship
between the board and management. This has resulted to various rules, principles
and regulation which have been issued in various countries in the area of
accounting, and internal control and audit committees to checkmate the operation
of corporate body and corporate fraud (different sectors) The objectives and
importance of introducing IFRS according to Fowokan (2011) are:
To develop a single set of high quality understandable and enforceable global
accounting standard that requires transparent and comparable information in
financial statements.
 IFRS require that financial statement give a time and fair view of the financial
health entitles
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 To work actively with the national setter to bring about convergences of
national accounting standards.
 To help participants in various capital markets (investors, stock brokers, etc)
across the globe to understand financial statements.
However, the theoretical foundation underpinning Nigeria GAAP and IFRS are not
all together similar, through, there will be increased responsibilities in setting
accounting politician that fit business models, on the part of the professional
accountants and the two who must also be ready to explain and justify these policies
in the content of the IFRS framework. In order to achieve the above objectives,
practical implementation of IFRS requires adequate technical capacity among
preparers and unions of financial statements (auditors, accountants and regulatory
authorities). The fact remains to impact knowledge one must be knowledgeable.
Gamba and Dunura (2011) supporting the above view, affirmed that there is need to
train the educators so as to be abreast with the IFRS. Hence, when they are well
trained and equipped they will be able to impact knowledge to others.
Therefore, the government, institutions, professional and corporate bodies
have a great role to play in this regard especially in subsidizing the training cost of
the educators. Most of the professional bodies require tertiary education certificate
as a prerequisite for enrolling for their professional examinations (NASB, 2010). The
input and output of the tertiary education system have a huge impact on the success
of IFRS implementation in Nigeria institutions. A study conducted by the NASB in
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2008 on "Gap Analysis" of accounting curriculum content and statement of
accounting curriculum content and statement of accounting standards in Nigeria
institutions showed the low level of coverage of the local standard in tertiary
institutions. In this regard, Tijike (2012) buttressed the above view by attesting that
the Institute of Chartered Accountants of Nigeria (ICAN) braised the trail when it
organized a one-day "interactive forum for accountants in education" free of charge
in Lagos on the 8th of March, 2012. The Accountants, Auditors e.t.c. whether in
companies or institutions are expected to abide by these rules and regulations, but
most of them are deviants to these rules. Hence, some of these accountants and the
management (managers) are deviants in reporting the financial statements based
on time and fair views. It is glaring that to operate in the modern day world
economy and to realize the full gains of international listing, no individual country
can act in isolation in to financial reporting standards.
1.1 BACKGROUND OF THE STUDY
In everyday usage, the term international financial reporting standard has
both narrow and broad meaning narrowly, IFRS refers to the new numbers series of
pronouncements that the IASB is issuing, as district from the international
accounting standards (IASS) Series issued by its predecessor. More broadly, IFRS
refers to the entire body of IASB pronouncements, including standards and
interpretations approved by the IASB and IASS and SIC interpretations approved by
the predecessor International Accounting Standard committee.
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Paragraph 7 of IAS 1 presentation of financial statements defines IFRS as
comprising International financial reporting standards, international accounting
standard IFRS international financial Reporting Interpretation committee and SIC
Standing Interpretation Committee interpretation.
However, the definition of IFRS was amended after the names changes
introduced by the revised IFRS foundation constitution in 2010.
Paragraph 8 of IAS 1 require that an entity whose financial statements
comply with IFRS shall make an explicit and unreserved statement of such
compliance in the notes. An entity shall not describe financial statements as
complying with IFRS unless they comply with all the requirements of IFRS. when a
standard or interpretation specifically applies to a transaction, other event or
condition, the accountancy policies applied to those items shall be determined by
applying the standard or interpretation and considering any relevant interpretation
guidance issues by the IASB for the standard or interpretation (IAS 87).
1.3 STATEMENT OF THE PROBLEM
The need for harmonization of financial statement ad single set of consistent
high quality financial reporting standard gained wide spread acceptance amongst
policy makers, standards setters and preparers. The need for quality and uniformity
in the preparation and presentation of financial statements gave birth to
international financial reporting standards (IFRS). Before the adoption in Nigeria,
there was legal and regulatory framework of accounting in respect to preparation of
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financial report in Nigeria. The company and allied matter Act (CAMA 1990)
prescribe some format and content of companies financial statement disclosure
requirement and auditing. It requires that the financial statement of all corporate
organisations comply and adhere with the statement of accounting standards (SAS)
issued from time to time by the Nigerian Accounting Standards board (NASB). This
also requires that audit be carried out in accordance to what the general auditing
standards.
Therefore, the adoption of IFRS in Nigeria was launched in September, 2010
by the minister of commerce and industry. This adoption was organized in such that
the entire stakeholders that prepare and present financial statement use it by the
beginning of 2014. The adoption was made in such a way that all the first tier
companies listed on the stock exchange and are of public interest use it by 2012, all
other company of public interest but not first tier are to adopt in 2013 and all small
and medium standard exists because it serves as stewards to the owner of firm as
ownership is divorced from controlling the activities of the business.
The management of organization seeks to establish rules and laws to guide
how they relate to each other to at least reduce conflicts. This is the essence of
regulations and management. Management is not effective if it is not supported by
good and globally financial reporting standards.
Orjioke (2002) opined that public companies, institutions e.t.c. can achieve
rapid growth and development if they are made to follow the regulation guiding
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financial reporting. To Emenike (1997) cited in Ejike (2002) research into the
regulation of financial regulation in public related offices/companies has been
scanty over the last decade. The problem of this study is to examine the extent of the
adoption of IFRS in Nigeria which is key to economic transportation and growth.
1.4 OBJECTIVES OF THE STUDY
The main objective of the study is determining the extent to which adoption
of International Financial Reporting Standards (IFRS) can enhance Financial
Reporting System in Nigeria. The specific objectives include;
1. To portray the process of adopting the IFRS in Nigeria as a developing
economy.
2. To identify the development of the accounting profession in Nigeria the legal
and regulatory framework of accounting.
3. To present the benefit of IFRS adoption
4. To examine the challenges of IFRS adoption
5. To present some recommendations for adopting and implementation of IFRS
for ensuring good financial reporting.
1.5 RESEARCH QUESTIONS
The following questions will guide the study;
1. What are the processes of adopting the IFRS in Nigeria as a developing
economy?
2. What are the levels of development of the accounting profession in Nigeria?
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3. What are the benefits of IFRS adoption?
4. What are the challenges of IFRS adoption?
5. Is there any relationship between IFRS adoption and the profitability of
manufacturing company?
1.6 STATEMENT OF HYPOTHESIS
The following hypothesis shall be tested in the course of the study.
Hypothesis one
H0: There is no significant benefit to be derived from the adoption of IFRS in
Nigeria?
H1: There is significant benefit to be derived from the adoption of IFRS in Nigeria?
Hypothesis two
H0: There is no significant relationship between IFRS adoption and the profitability
of manufacturing company?
H1: There is significant relationship between IFRS adoption and the profitability of
manufacturing company?
1.7 SCOPE OF THE STUDY
The experiment is poised to study the problems and prospects of the adoption of
International Financial Reporting Standards in Nigeria using Nigerian Breweries,
Ibadan.
1.8 SIGNIFICANCE OF THE STUDY
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The study shall be significant in the following ways:
1. It will provide directors, board of governors, managers and every stakeholder
with more effective ways of analyzing and reporting financial statement.
2. It will also raise the level of confidence which the public has on the financial
statement published by companies.
3. The research will also draw the government attention to provide and
implement a consistent policy for sustainable development of our national
economy as well as strengthening and consolidate the Nigerian Economy.
4. The research will serve as a reference material to government, individuals,
students and other researchers.
1.9 JUSTIFICATION OF THE STUDY
This research work would form an avenue for providing information for both
present and potential organisations on the need for the adoption of International
Financial Reporting Standards (IFRS) as well as its uses and benefits to the
organization. It will also find solutions to curb the challenges facing adoption of IFRS
in Nigeria.
1.10 DEFINITIONS OF TERMS
1. Financial Reporting: this is the process of producing statements that
disclose an organisations financial statement to management, investors and
the government
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2. IASB: The International Accounting Standard Board (IASB) is the
independent accounting standards setting body of the IFRS foundation
3. Accounting Standards: Accounting standards are authoritative standards
for financial reporting and are the primary source of Generally Accepted
Accounting Principles (GAAP). Accounting standards specify how
transactions and other events are to recognised measured in presented and
disclosed in financial statements.
4. Financial statements: financial statements are a collection of reports about
an organizations financial results, financial conditions and cash flows.
5. International standards: these are standards developed by international
standards organisations. International standards are available for
considerations and use worldwide. The most prominent organization is the
international organization for standardization (ISO).
6. GAAP: Generally Accepted Accounting Principles (GAAP) are the standard
framework of guidelines for financial accounting used in any given
jurisdiction; generally known as accounting standards or standards
accounting practice.
7. The financial Reporting Council of Nigeria (FRCN): This is formally the
Nigeria Accounting Standards Boards (NASB) is an organization
changed with settings accounting standard in Nigeria. NASB was
established in 1982 as a private sector initiative closely associated with the
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Institute of Chartered Accountant of Nigeria (ICAN).
NASB became a government agency in 1992 reporting to the federal minister
of commerce. The Nigeria Accounting Standards Boards Act of 2003 provides
the legal framework under which NASB set accounting standards.
8. Globalization: globalization is the process in which people, ideas and goods
spread throughout the world spurring more interaction and integration
between the world cultures, governments and economies.
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CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION
Internationalization and globalization of business has given reason for
harmonized financial statement preparation and presentations. Companies compete
globally for limited resources, Shareholders, potential are creditors as well as
multinational enterprises are required to bear the cost of adopting financial
statement ate prepared using national standards. It is expected that the move
towards IFRS will enhance capital market performance and ginger global business
expansion in Nigeria. In the view of this development, all corporate Organisations
are expected to adopt and comply with IFRS in preparation and presentation of
their financial statement.
There are a number of studies that have examined the various aspects of IFRS
adoption and implementation in developing countries. IFRS are standards and
interpretations adopted by the interpretations accounting standards board (IASB).
They include international financial Reporting standards (IFRS), international
Accounting standards (IAS) and interpretation originated by the international
Reporting standards interpretations committee (IFRSIC) (Oyedele, 2011). Jacob and
Madu (2009) recognized IFRS as a single set of high- quality, globally accepted
accounting standards that can enhance comparability of financial reporting across
the globe. This increased comparability of financial information could result in
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better investment decisions and ensure a more optimal allocation of resources
across the global economy. Cai and Wong (2010) added that having a single set of
internationally acceptable financial reporting standards will eradicate the need for
restatement of financial statements, yet ensure accounting variety among countries,
thus facilitating cross-border movement of capital and greater integration of the
global financial markets, for countries to adopt, IFRS sunder (2010) proposes six
bases for decision as: involvement to wealth and prosperity of society, inclusion of
pertinent information from all parts of the economy, stability over time, adaptability
to changes in economic environment, strength against manipulations, and
confrontation to capture by narrow interest groups. Several scholars have
established that adoptions of IFRS at country level has increased direct foreign
investment (Irvine & Lucas, 2006), high level of global market integration and
develop quality accounting indicators (Chai, tang, Jiang, & Lin, 2010). Additionally,
adoption of IFRS at the firm level has improved accounting quality (Meeks & Swann,
2009; Barth; 2008) and financial performance (Latridis, 2010).
The study conducted by Islam (2009) mentioned that ensuring disclosure
quality of financial information is mandatory for reducing information asymmetry
and solving agency problem in the corporate sector. It has been discovered in the
existing pieces of literature that there are considerable improvements in accounting
quality following IFRS adoption (Barth et al., 2008; Barth et al;. 2006; Gassen &
Sellhorn , 2006; Hung & Subramanyam, 2007) Chamisa (2000) 16 have examined
19
the international standards' role in improving the quality of financial information
twisted for a stock market in the developing countries. He distinguished that those
standards are critically and crucially important for the developing countries with an
active financial and capital market and are devoid of such significance regarding the
other developing countries. Moreover, on examining the development of accounting
regulations in Jordan, AI-Akra et al. (2009) have analyzed the impact of economic,
political, legal and cultural factors on promoting the accounting practices. They
come to an end that the political and economic factors are the elements which
contribute most to this development.
IFRS is such accounting standards which have led to eliminating the global
accounting differences and standardizing reporting formats, IFRS eliminate many of
the adjustments that analysts historically have made in order to make companies'
financial information more comparable internationally. IFRS adoption, therefore
could make it less costly for investors to compare firms across markets and
countries (e.g., Armstrong et al., Coving, Defend, and Hung, 2007). Thus, a common
set of accounting standards would reduce information asymmetries among
investors and/or lower estimation risk by increasing comparability between lower
and higher quality firms. The gain would be greatest for institutions that create
large, standardized-format financial databases. Similarly, accounting diversity could
be an impediment to cross-border investment (Bradshw, Bushee, and Miller, 2004).
Thus, reducing international differences in accounting standards assists to some
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degree in facilitating international integration of capital markets (Covrig, Defend,
and Hung, 2007) by removing barriers to cross- border acquisitions and
divestitures, which in theory will reward investors with increased takeover
premiums.
Although many countries have faced challenges in their decisions to adopt
IFRS, its widespread adoption has been promoted by the argument that the benefits
outweigh the costs (lyoha and Faboyede, 2011). Alp and Ustanding (2009)
deliberated the development process of financial reporting standards around the
world and its practical results in developing countries found that Turkey had
encountered several complications in the adoption of IFRS. Such complications
include the complex structure of the international standards, potential knowledge
deficit and other difficulties in the application and enforcement issues.
SIMILARLY, in a study on adoption of IFRS at firm level, Meeks and Swann
(2009) revealed that firms adopting IFRS had exhibited higher accounting quality in
the post -adoption period than they did in the pre-adoption period, in a study of
financial data of firms covering 21 counties, Barth (2008) confirmed that firms
applying IAS/IFRS experienced an improvement in accounting quality between the
pre-adoption and post-adoption periods.
There are more arguments that IFRS are inappropriate in developing and
emerging economics. Irvine and Lucas (2006) reported that the development of a
globalized set of accounting standards provides other benefits that are not so
21
significant to developing and emerging nations, the adoption of IFRS will save
expenses of preparing financial statement as they have to prepare one set of account
instead of different sets for different national jurisdictions, the professional status of
accounting bodies will be enhanced and the big accounting firms will benefit in their
efforts to expand the global market for their services.
As evident from the literature review, a good number of studies carried out in
different countries have highlighted the benefits of having a single set of financial
reporting standards across the globe. Few of the studies have given a contradictory
view where in the articles talk about the difficulties and complications faced in
implementation IFRS.
2.1 CONCEPTUAL FRAME WORK
The expansion of international trade and the accessibility to foreign stock and
debt market has given impetus to increasing the debate on whether or not there is
need be a global set of accounting standards. As companies compete globally for
scarce resources, investors and creditors as well as multinational companies
required to bear the cost of reconciling financial statements that are prepared using
national standards. It was argued that a common set of practices will provide a
"level playing field" for all companies worldwide (Murphy, 2000). IFRS are
standards and interpretations adopted by the international accounting standard
board (IASB). They include international financial reporting standards (IFRS),
international accounting standards (IAS) and interpretation originated by the
22
international Reporting standards interpretation committee (IFRSIC) (Oyedele,
2011). IFRS represent a single set of high quality; globally accepted accounting
standards that can enhance comparability of financial information could result in
better investment decisions and ensure a more optimal allocation of resources
across the global economy (Jacob and Madu, 2009). Cai and Wong (2010) posited
that having a single set of internationally acceptable financial reporting standards
will eliminate the need for restatement of financial statements, yet ensure
accounting diversity among countries, thus facilitating cross - border movement of
capital and greater integration of the global financial markets.
Esptein (2009), emphasized the fact that universal financial reporting
standards will increase market liquidity, decrease transaction costs for investors,
lower cost of capital and facilitate international capital formation and flows, various
studies conducted on the adoption of IFRS at country level indicated that adopted
IFRS experienced huge increases in direct foreign investment (DPI) flows across
countries (Irvine and Lucas, 2006). Cai & Wong (2010), in a study of global capital
markets demonstrated that capital markets of countries that had adopted IFRS
recorded high degree of integration among after their IFRS adoption compared with
the period before adoption.
In a study on financial data of public listed companies in 15 member states of
the European Union (EU) before and after full adoption of IFRS in 2005, Chal at al
(2010), found that majority of accounting quality indicators improves after IFRS
23
adoption in the EU. In a study on the question of usefulness of IAS/IFRS for
developing countries using a case study of Zimbabwe, Chamisa (2000), analysed the
impact of the adoption of IASB standards on the accounting practices of listed
companies. Results of the study revealed that these standards have particular
importance for developing countries with emerging financial markets. In an analysis
of the IAS/IFRS implementation process in developing countries using Armenia as
the analytical framework McGee (1999), showed that this process poses difficulties,
which can be overcome by concerted efforts in training and information
dissemination about the new standards.
Alp and Ustandag (2009) studied the development process of financial
reporting standards around the world and its practical results in developing
countries found that Turkey had encountered several complications in the adoption
of IFRS. Such complications include the complex structure of the international
standards, potential knowledge shortfall and other difficulties the application and
enforcement issues.
Similarly, in a study on adoption of IFRS at firm level, Meeks and Swann
(2009), demonstrated that firms adopting IFRS had exhibited higher accounting
quality in the post adoption period than they did in the pre-adoption period. In a
study of financial data of firms covering 21 countries, Barth (2008), confirmed that
firms applying IAS/IFRS experienced an improvement in accounting quality
between the pre-adoption and post -adoption periods. Latridis (2010), concluded on
24
the basis of data collected from firms listed on the London stock exchange that IFRS
implementation has favourably affected the financial performance (measured by
profitability and growth potentials).
There are also growing numbers of studies that question the relevance of
IFRS in developing and emerging economies. Irvine and Lucas 2006). also reported
that the development of globalized set of accountings standards provides other
benefits that are not so relevant to developing and emerging nations. The adoption
of IFRS will save multinational Corporations the expense of preparing more than
one set of accounts for different national jurisdictions, the professional status of
accounting bodies will be enhanced and the big accounting firms will benefit in their
efforts to expand the global market for their services. Perera (1989), posited that
accounting information produced according to developed countries. As evident from
the foregoing, a good number of studies carried out in different countries have
highlighted the benefits of having single set of financial reporting standards across
the globe. Few of the studies have given contradictory views questioning the
relevance of IFRS adoption in developing and emerging economies.
2.1.1 DEVELOPMENT OF ACCOUNTING PROFESSION IN NIGERIA:
BRIEF OVER VIEW:
The Accounting profession in Nigeria received a formal reckoning in the mid-
1960 (Chibuke; 2008). During that period, Nigeria accountants, mostly trained by
professional accounting bodies in the United Kingdom came together and formed a
25
professional accounting body that is responsible for the training of accountants in
Nigeria and foresting the development of the profession in the country. Presently,
however, a number of professional accounting bodies carry out such functions
concurrently. These bodies pay much attention to the teaching of technical and
practical aspects of accounting.
The two accounting bodies in Nigeria are the Institute of Chartered
Accountants of Nigeria (ICAN) and the Association of National Accountants of
Nigeria (ANAN). They are in essence self -regulating, and both membership elect
governing council members. There is no separate statutory body for the audit
profession. ICAN acts as an examining body for awarding chartered accountant
certification and as the licensing authority for members engaged in public auditing
practices. Members of ICAN are recognised under the companies and Allied matters
Act as the sole auditors of company accounts. ICAN is a member of the international
federation of accountants (IFAC) and has strong international foundation and
relationship ICAN members dominate accounting and auditing services in the
private sector while ANAN members are mostly employed in the public sector.
2.1.2. LEGAL AND REGULATORY FRAMEWORK OF ACCOUNTING IN NIGERIA
THE COMPANIES AND ALLIED MATTERS ACT (CAMA 1990)
The Companies and Allied matters Act, 1990 prescribes some format and
content of company financial statements, disclosure requirements and auditing it
also requires that financial statement comply with the statement of accounting
26
standards (SAS) issued from time to time by the Nigerian accounting standards
board (NASB) and that audit be carried out in accordance with generally accepted
auditing standard.
THE NIGERIAN ACCOUNTING STANDARDS BOARD (NASB) ACT 2014
The NASB Act, No 22 of 2003, formally created the Mg standards board and also
established for it an Inspectorate unit. NASB came into being on September 9 1982.
it is the only recognised independent body in Nigeria responsible for the
development and issuance of statements of accounting standards for users and
preparers of financial statements, investors, commercial enterprises and regulatory
agencies of government.
2.2 THEORETICAL FRAME WORK
2.2.1 THE RATIONAL UTILITY MAXIMIZATION THEORY
Marnet (2008) emphasized that this theory evoke the presence of calculating
utility maximize who would not succumb to what presumably amount to irrational
behaviour. Furthermore, many conventional means for improving corporate
governance depend on the premise that business managers are strongly rational
agents with long-term horizon. Freeman (1957) also disclosed that the rational
maximization theory is based on the following assumptions:
i. The individual is self-interested Maximizer;
ii. Has stable and consistent preferences or taste;
iii. capability of rationale choice behaviour in accordance to certain decision
27
rules (axioms);
iv. Independent/neutral monitors (gatekeepers) motivated by reputational
and legal concern to withstand pressures.
However, observed monitors/gatekeepers behaviour appears to be odd in
contrast to these assumptions of self-interest and rationality. Logic, for example,
would predict that a gatekeeper (i.e auditors) would not sacrifice reputational
capital for small amount of financial gains, yet gatekeepers (auditors) have been
observed to jeopardize their reputation for financial gains that were far smaller than
potential losses. The obvious answer about why management including directors
engage in fraud and gatekeepers (auditors) were complicit is that they did so
because it was profitable to them or at least appeared to be so.
Adeside (2008) argued that corporate governance corporate code violator
connive or evade the regulators through fraudulent mechanisms whereby
principally, the audited financials sent to the central bank of nigeria (CBN) is usually
profit-oriented since it is that same audited account that would be published
showing bogus profit in cider to make their shares attractive at the capital market
after a compromised approval have been obtained from the CBN. For the same
accounting period, the audited account that would be forwarded to the Nigeria
Deposit insurance corporation (NDIC) would have a depleted deposit base for the
bank to pay an inconsequential 1% insurance premium to NDIC. for the same
accounting year too, the audited accounts that it sent to the federal inland revenue
28
services (IFRS) would have a reduced profit so that these banks would not pay any
corporate tax to the coffers of the federal government of Nigeria while at the same
cancelling withholding tax and value added tax (VAT) deductions thereby
defrauding the federal government of Nigeria of revenue due it economic
development.
Akpan - Essien (2011) stated also that the adoption of the IFRS will ensure
transparency accountability and integrity in financial reporting necessary for
addressing the crisis in the financial sector in Nigeria which was responsible for the
Nigeria loss of the foreign direct investment (FDI) in the oil and gas sector to
countries such as Ghana that have better financial reporting standards in place.
2.2.2 PURE IMPRESSION MANAGEMENT MODEL
Pure Impression Management Model (PIMM) of accounting was propounded
by Keppler in 1995 and the theory states that accountability serves as a linkage
construct by continually reminding people of the need to:
a. Act in accordance with the prevailing form and content of financial reporting
b. Advance compelling, justification/excuses for conduct that deviate from the
form and content of financial reporting.
In the real sense, financial reporting cannot be accepted by general public or
would be investors of certain guidelines/standards that are generally expected are
not followed and observed. This theory is relevant standards are meant for the
smooth functioning of the public companies, this theory is relevant to the present
29
study in that it focuses on behavioral aspect of accounting.
Accountability is the missing link in the seemingly perpetual level of analysis
controversy, the connection between individual decision makers and the collectives
within which they live and work.
The concept accountability serves as a linkage construct by continually
reminding people of the need to:
a. Act in accordance with the prevailing norms
b. Advance compelling justifications or excuses for conducts that deviates from
those norms
The PIMM recognizes that a large measure of trust and self accountability is
necessary for the smooth functioning of institutions. Therefore, if PIMM of
accountability is properly utilized by the management of companies or institution in
Nigeria, it will fetch a good result on public accountability.
2.3 EMPIRICAL REVIEW
Portes and Rey (2005) in their studies that most stock market investors
refers domestic assets but despite this, a geographical pattern of international asset
transaction proves that financial information is not equally available to all market
participants but where they are readily available in easily understood format, there
have been significant consequences on the level of investors activities. UNCTAD
(2001) report shows that EDI inflow to Africa declined by (9%) between 2010 ($50
billion) and 2009 ($55 billion).
30
Mangena and Tauringana (2006) in their studies also provided firm level
evidence for a sub- Saharan African country, Zimbabwe, of positive effect of
governance on the fraction accounted for by foreign share ownership of companies.
They contended and postulated that because greater disclosure, especially due to
the fact that the foreign investor portfolio are usually minority shareholders and
therefore more susceptible to expropriation by local managers or controlling
shareholders. They investigated foreign share ownership in Zimbabwe by
examining whether differences in foreign share ownership (i.e percentage
shareholding owed by foreign investors) across companies listed in the country's
stock. Exchange are related to the country specific differences in disclosure and
corporate governance mechanisms. The study reports that foreign share ownership
is positively associated with high standard disclosure and audit committee
independence.
2.3.1 BENEFITS OF ADOPTING IFRS IN NIGERIA
The adoption IFRS has several benefits as evidenced by previous studies
carried out by several scholars some of which include the following: (Leuz and
Verrecchiia. 2017): Decreased cost of capital, (Bushman and piotroski, 2046):
Efficiency of capital allocation, (Young and Guenther, 2017): International capital
mobility, (Ahmed 2017): Capital market development (Adekoya, 2017): increased
market liquidity and value (okere, 2017): enhanced comparability (Bhattacharjee
and Hossain 2017): cross border movement of capital, (Mike, 2017): improved
31
transparency of results. The potential benefits That Nigeria stands to gain after IFRS
adoption are seen in the light of:
i. Promotion of the compilation of meaningful data on the performance of various
reporting entities at both public and private levels in Nigeria thereby
encouraging comparability, transparency, efficiency and reliability of financial
reporting in Nigeria.
Assurance of useful and meaningful decisions on investment portfolio in Nigeria
investors can easily compare financial results of corporation and make
investment decisions.
ii. Attraction of direct foreign investment countries attract investment through
greater transparency and a lower cost of capital for potential investors, for
example, cross border listing is greatly facilitated by the use of IFRS.
iii. Assurance of easier access to external capital for local companies
iv. Reduction of the cost of doing business across borders by eliminating the need
for supplementary information from Nigeria companies.
v. Facilitation or easy consolidation of financial information of the same company
with offices in different countries multinationals companies avoid the hassle of
restating their accounts in local GAAPs to meet the requirements of national
stock exchange and regulators, making the consolidation of accounts of foreign
subsidiaries easier and lowering overall cost of financial reporting.
vi. Easier regulation of financial information of entities in Nigeria
32
vii. Enhanced knowledge of global financial reporting standards by tertiary
institutions in Nigeria.
viii. Additional and better quality financial information for shareholders and
supervisory authorities
ix. Government to be able to better access the tax liabilities of multinational
companies.
2.3.2 CHALLENGES TO IFRS ADOPTION IN NIGERIA
The practical challenges that may be faced in Nigeria as a result of
implementing the IFRS need to be identified and addresses in order to benefit fully
from the introduction of IFRS. These challenges have been evidenced by previous
studies conducted by scholars such as: (Alp and Ustundag, 2009): potential
knowledge shortfall, (Li and Meeks, 2006): legal system effect, (Shleifer and Vishny,
2003): tax system effect, (Irvine and Lucas, 2006): education and training, (Martins,
2011): enforcement and compliance mechanism. The challenges are discussed as
follows:
 LEVEL OF AWARENESS
The transition plan to IFRS and its implications for preparers and users of
financial statements, regulators, educators and other stakeholders have to be
effectively coordinated and communicated. This should include raising awareness
on the potential impact of the conversion, identifying regulatory synergies to be
derived and communicating the temporary impact of the transition on business
33
performance and financial position, the implementation of IFRS requires
considerable preparation both at the country and entity levels to ensure coherence
and provide clarity on the authority that IFRS will have in relation to other existing
national laws.
 ACCOUNTING EDUCATION AND TRAINING
Practical implementation of IFRS requires adequate technical capacity among
preparers and users of financial statements, auditors and regulatory authorities.
Countries that implemented IFRS faced a variety of capacity-related issues,
depending on the approach they took. One of the principal challenges Nigeria may
encounter in the practical implementation process, shall be the shortage of
accountants and auditors who are technically competent in implementation IFRS.
Usually, the time lag between decision date and the actual implementation date is
not sufficiently long to train a good number of professionals who could competently
apply international standards.
 TRAINING RESOURCES
Professional accountants are looked upon to ensure successful
implementation of IFRS. Along with these accountants, government officials,
financial analysts, auditors, tax practitioners, regulators, accounting lecturers, stock-
brokers, prepares of financial statements and information officers are all
responsible for smooth adoption process. Training materials on IFRS are not readily
available at affordable costs in Nigeria to train such a large group which poses a
34
great challenge to IFRS adoption.
 TAX REPORTING
The tax considerations associated with the conversion to IFRS, like other
aspects of a conversion, are complex. IFRS conversion calls for a detailed review of
tax laws and tax administration, specific taxation rules would have to be redefined
to accommodate these adjustments. For instance, tax laws which limit relief of tax
losses to four years should be reviewed. This is because transition adjustments may
result in huge losses that may not be recoverable in four years. Accounting issues
that may present significant tax burden on adoption of IFRS, include determination
of impairment, Loan loss provisioning and investment in Securities/Financial
instruments.
 AMENDMENT TO EXISTING LAWS
In Nigeria, accounting practices are governed by the companies and Allied
Matters Act (CAMA) 1990, and the statement of Accounting standards (SAS) issued
by the Nigerian Accounting Standards Board (NASB) and other existing laws such as
Nigerian stock Exchange Act 1961, Nigerian Deposit Insurance Act 2006, Banks and
other financial institution Act 1991, investment and Securities Act 2007, Companies
income Tax Act 2004, Federal Inland Revenue Services Act 2007. All these provide
some guidelines on preparation of financial statements in Nigeria. IFRS does not
recognize the presence of these laws and the accountants have the IFRS fully with
no overriding provisions from these laws. Nigerian law makers have to make
35
necessary amendments to ensure a smooth transition to IFRS.
2.3.3 BENEFITS AND CHALLENGES TO THE IMPLEMENTATION OF IFRS TO
ECONOMIC DEVELOPMENT
Result arising from investigation conducted on the European Union member
states highlighted how IFRS has benefited European countries in terms of attracting
Foreign Direct Investment (FDI). IFRS will position Nigerian companies in the global
market place as well as ensure transparency, accountability and integrity in
financial reporting in Nigeria which is a prerequisite for the attraction of investment
that will promote economic development. It will provide international investors the
ability to make well informed, useful and meaningful comparison of investment
portfolio in Nigeria and other countries. Multinational companies with the aid of
IFRS financial statement provide for easy consolidation of financial statements. It
promotes better management control systems. IFRS statements are easier to comply
with the financial requirements of overseas stock, it also facilitate ease of cross
border transactions and trading within the region through common accounting
practice especially in/underdeveloped regions of the world like the Economic
community of west Africa states (ECOWAS). It will help to facilitate compilation of
meaningful data on the performance of enterprises within the ECOWAS and other
regions of the world. It will assists Nigeria, the federal and state government, local
governments inclusive, in attracting international investors as the adoption of IFRS
financials promotes easy monitoring of overseas investments, Transparency and
36
better accountability in government ministries, Departments and Agencies (MDA)
will be promoted through the IFR adoption in the public sector accounting and
management of resources.
It will also lead to increase in government revenue as a result of transparency
and integrity in reporting. Easier access to capital is also facilitated through IFRS.
Despite the aforementioned envisaged benefits there are still challenges. There is
the urgent need to improve the level of public awareness especially among investors
and regulatory authorities in Nigeria, there is also chronic shortage of professionals
that are competent to implement the IFRS within the given time frame as contained
in the schedule of the Nigerian roadmap for its adoption (i.e. January 2012- January
2014).
2.3.4 REQUIREMENTS THAT WILL ASSIST IMPLEMENTATION OF IFRS IN
NIGERIA
To achieve international convergence requires consensus by countries
especially in respect National standards that will serve as the foundation for
financial reporting and auditing globally and taking steps to encourage
implementation, if there are any impeditions to our ability to follow professional
standards, the institute of Chartered Accountants of Nigeria, the Nigeria accounting
standards Board, together with international and other standard setters, regulators
would need to get familiar with fair measurement techniques in the preparation of
financial statements.
37
We need accounting standards that are consistent, comprehensive and based
on clear principles that communicate economic reality and in the global world
which we are living, homogenous enough so as to allow their use and facilitate
understanding by everyone. Adequate corporate governance practices are required,
which among other things, should ensure appropriate internal controls and
implementation of these accounting standards. There is need for the existence of
efficient and effective audits which should grant external reliability to the
information prepared by the companies following the referred standards. Besides
there should be a supervision or quality control mechanism accompanied by a
disciplinary system, which should ensure effective compliance with the earlier
mentioned conditions, in addition, companies to explain the impact of IFRS
convergence to their investors to enable them readily accept the shift from Nigeria
GAAP to IFRS.
2.4. FINANCIAL REPORTING REGULATIONS AND REGULATORS IN NIGERIA
There are various financial reporting regulators in Nigeria. The Regulatory
Bodies are thus:
 The Corporate Affair commission (CAC)
 The Nigeria Accounting standard Boards (NASB) now financial reporting
council of Nigeria (FRCN)
 The National Insurance Commission (NAICOM)
 The Central Bank of Nigeria (CBN)
38
 The Security and Exchange Commission (SEC)
 The Nigeria Stock Exchange Commission (SEC)
 Institute of Chartered Accountants of Nigeria (ICAN)
 Nigeria Deposit Insurance Corporation (NDIC)
Other regulators include:
 The Companies and Allied Matters Act 1990 as Amended
 The Banks and Other Financial Institutions Act (BOFIA 1991)
 The Insurance Act of 2013
 Investment and Security Act of 1999
 Companies Income Tax Act 2004 (as amended)
 Petroleum Profit Tax Act 2004
 Pension Reform Act 2005, and
 Federal Inland Revenue Service (Establishment) Act 2007
The practice of accountancy profession globally is governed by sets of rules
and guidelines. These rules and guidelines, however, compiled into standard. There
are two sets of standards governing the accountancy practice in Nigeria. They
include:
 International Standards - international accounting standards (IAS)
 Local Standards - statement of accounting standards (SAS)
Unveiling the need for IFRS, the minister of commerce and industry (Senior
Jubril Martin Kuye) noted that the search for global accounting standards as
39
captured by the IFRS was as a result of the collapse of US energy giant, Enron when
accounting profession came wider scrutiny and led to global questioning of accounts
experience, integrity and existence of standards in the world of business. The
minister also advised that all other public interest entitles are expected to
mandatorily adopt IFRS for statutory purposes by January 1st 2013, while small and
medium sized entitles (SMSs) shall mandatorily adopt the system on January 1st
2014. This call for a better understanding and appreciation of the risks involved and
would necessitate that financial statements prepared in Nigeria irrespective of the
sector use global financial reporting benchmarks (Garuba et al, 2011).
2.4. COMPONENTS OF IFRS FINANCIAL STATEMENTS
Alistar (2010) defined IFRS as a series of accounting pronouncements
published by the internal accounting standard Board (IASB) to help prepare
financial statements throughout the world, to provide and present high quality,
transparent and comparable financial information.
According to Essien-Akpan (2011), the components of IFRS financial
statements includes fair representation, accounting policies, going concern, accrual
basis of accounting consistency, materiality, off - setting comparatives.
Fair presentation- is the appropriate of IFRS result in financial statements
that achieve fair presentation resulting from the selection of appropriate accounting
policies and their applications.
Accounting policies- are the specific principles, bases, convention, rule and
40
practices adopted by an entity in preparing and presenting financial statements.
Policies selected must comply with the interpretation of the international financial
reporting interpretation.
Committee (IFRC), where there are no specific requirements, policies should
ensure relevance and reliability of information. Such financial statements should
disclose that they comply with IFRSs.
Compliance should not be claimed unless all applicable IFRS and
interpretation have been applied. A company's financial statements should disclose
the accounting policies that have been selected and used.
Going concern- is described as an entity's ability to continue in the
foreseeable future, usually one year and especially if certain conditions ceases to
exist. An entity prepares financial statements on a going concern basis unless
management either intend to liquidate the entity or to ease trading or has no
realistic alternatives but to so. Where there is material uncertainties related to
events pr conditions that may cast significant, doubts on the entity's ability to
continue as a going concern, the entity shall disclosure those uncertainties
management, when preparing financial statement, makes an assessment of an
entity's ability to continue as a going concern.
Accrual Basis of accounting - recognizes transactions and events when they
occur and not when cash is received or paid. They are recorded in accounting
records and reported in the financial statements of the periods to which they relate.
41
An enterprises should prepare its financial statements under the accrual basis of
accounting except for cash flow statements cash flow statements look at the cash
transactions within the periods.
Consistency- Arises when an item's presentation and classification is retained
from one period to the next. Materiality- Information is material if its omission or
misstatement could influence the economic decisions of users taken on the basis of
the financial statements. Each material class of similarities should be presented
separately in financial statements. Each materials class of similar items should be
presented separately in the financial statements. Materiality depends on the size
and nature of the item. Items of dissimilar nature shall be presented separately
unless they are immaterial.
Offsetting- Emphasis that assets and liabilities and income and expenditure
shall not be offset unless required or permitted by a standard or interpretation.
Comparativeness- should be provided for all numerical information except when a
standard offers an exemption.
2.4.2 ROADMAP FOR THE ADOPTION OF IFRS AND THE IMPLICATIONS IN
NIGERIA
The roadmap to the adoption of the IFRSs in Nigeria was its announcement
on 2/9/10 by the federal government of Nigeria disclosing the schedule for the
implementation as follows All companies listed on the nigeria stock exchange (NSE)
and significant public entities are expected to have complied with IFRS since 1st
42
January, 2012 Other public interest entitles will commence with effect 1st January,
2013 The commencement year for small and medium sized entitles will be with
effect from 1st January, 2014 The implication of the schedule of adoption of the IFRS
in Nigeria is the harmonization of the disparity of the existing Nigeria's standards
with that IFRSs together with the necessity to develop new skills. A transaction
programme from Nigeria accountancy standards to IFRS will require systems and
controls are to be designed to ensure consistency in the application of standards.
2.4.3 ADOPTION STATEMENT OF IFRS
It is the best interest of the nation to adopt the IFRS. The transition should be
phased do that the objectives are achieved within the time-frame as outlined in the
roadmap. The phases are explained as follows.
Phase 1: publicity Listed and significant public interest Entities
This means government business entitles, all entities that have their equities
or debt instruments listed and trade in the public markets (a domestic or foreign
stock exchange or an over-the-counter markets). Examples of entitles meeting these
criteria include: nigeria national petroleum corporation (NNPC) banks and
insurance companies.
Transition date for SPEs begins 2010, with a preparers of IFRS financial
statements followed by planning training and analyzing the impact of IFRS adoption
on people system and process and on business of firms. By the year 2011, SPPs will
then identify the key reporting data and prepare IFRS opening statement of financial
43
position (SFP). By the year 2012 SPEs are required prepares quarterly report using
IFRS rules follow audit procedures and investor relations to educate analysts,
investors and manage external stakeholders. By the year 2013, SPEs would identify
the loopholes in the existing system and processes by ensuring compliance and
monitoring.
Phase 2: other public interest Entities
This refers to those entities, other than listed entities (unquoted, private
companies) which are of significant public interest because of their nature of
business, size, number of employees of their corporate status which requires wide
range of stakeholders. Examples of entities meeting these criteria are large -not -
profit for PIEs to entities such as charities and pension funds.
Transition date for PIEs begins by the year 2011with a reporting date of
2013. By which period opening SP and comparative figures are expected to be
prepared. By 2013, PIEs are required to prepare quarterly reports using IFRS, audit
procedures, and investor communications.
Phase 3: small and medium - sized entities (SMEs)
Small and medium - sized entities (SMEs) refers to entities that may not have
public accountability and their debt or equity instruments are not traded in a public
market:
 They are not in the process of issuing such instruments for trading in a public
market
44
 They do not hold assets in fiduciary capacity for a broad group of outsiders as
one of their primary business.
 The amount of their annual turnover is not more than N500 million or such
amount as may be fixed by the Corporate Affairs Commission
 Their total assets value is not more than N200 million or such amount as may
be fixed by the corporate affairs commission.
 No Board members are foreigners
 No members are a government or a government corporation or agency or its
nominee
 The directors among them hold not less than 51 percent of its equity share
capital Entities that do not meet the IFRS for SME's criteria shall report using
Small and Medium - sized Entities Guidelines on Accounting (SMEGA) Level 3
issued by the United Nations Conference on Trade and Development
(UNCTAD).
Transition date for SMEs began by 2012 with a reporting date of 2014. SMEs
commence transition to IFRS by 2012, preparing opening SFP and comparative
figures and investor communications by 2013, adopting IFRS reporting standards,
and ensuring compliance and monitoring by 2014.
2.4.4 REASONS FOR IFRS
Listed companies have a lot of benefits to derive from conversion to IFRS.
Companies do not operate in isolation. Therefore, in the present global,
45
environment, compliance with foreign reporting requirements will help streamline
their financial reporting. This will help minimize reporting costs as a result of
common reporting system and consistency in statutory reporting.
Secondly, it will enable comparison/benchmarking with foreign competitors
possible. Besides, adoption of IFRS may offer companies on edge over competitors
in the eyes of users.
Thirdly, since the adoption of IFRS will transcend national boundaries/cross
border, acquisitions and joint venture will be made possible and there will also be
easy access to foreign capital.
Fourthly, companies can trade their shares and securities on stock exchanges
worldwide. For instance, present and emerging stock exchanges would require
financial statements prepared under WRS. Globally, investors would be able to make
rationale and informed decisions. Fifthly, convergence of financial statement
prepared would provide a platform for management to view all companies in a
group on a common platform.
Thus time and efforts will reduce to adjust the accounting order to comply
with the requirements of the national GAAP. Business acquisition would be reflected
at fair value than at the carrying values. There will be more objectivity and
transparency in financial statements. For companies to key into these benefits
mentioned above, a single set of accounting standards worldwide would ensure that
auditing firms, standardize there training and quality of work that they maintain
46
globally. In summary, implementation of IFRS would give rise to the following
benefits.
i. Uniform application of principles - same language
ii. Cross border investments leading to economic growth and development, it will
also lead to increase globalization of commerce and trade.
iii. Easy comparability of financial statements of O or more companies worldwide
iv. Tax authorities will find it easy to assess tax payers for payment and collection
globally, in addition time and money will be served by international accounting
firms in planning of accounting and audits
v. Administrative cost of accessing the capital markets would be reduced for
companies Globally, in addition time and money will be saved by international
accounting firms in planning of accounting and audits.
vi. Multinational companies will find it easy to carry out mergers and acquisition,
easy access to multinational capital, the cumbersome task of consolidation of group
financial statements would be simplified and accounting and audit functions will
also be made easy.
47
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 INTRODUCTION
The purpose of conducting an empirical research is to get new information or
to expand or verify existing knowledge. It can also be for the purpose of creating
room for further research if the need arises. The research methodology is concerned
with the methods of collecting data for this research work for the purpose of this
work all the necessary techniques of data collection were through primary and
secondary sources, by the use of interview and direct observation of the study
elements concerned in the study.
3.2 AREA OF STUDY
This study will focus on Nigerian Breweries Plc as the pioneer and largest
brewing company in Nigeria. It serves the Nigerian market and exports to other
parts of West Africa. Incorporated in 1946, its first bottle of beer, STAR Larger,
rolled off the bottling lines of its Lagos brewery in June 1949. Other breweries were
subsequently commissioned by the company, including Aba Brewery in 1957,
Kaduna Brewery in 1963, and Ibadan Brewery in 1982. In September 1993, the
company acquired its fifth brewery in Enugu, and in October 2003, its sixth brewery,
sited at Ameke in Enugu. Ama brewery began brewing on the 22 March 2003 and at
3 million hectolitres is the largest brewery in Nigeria. Operations at Enugu brewery
were discontinued in 2004, while the company acquired a malting Plant in Aba in
48
2008.
In October 2011, Nigerian Breweries acquired majority equity interests in
Sona Systems Associates Business Management Limited, (Sona System) and life
Breweries Limited from Heineken N.Y. this followed Heineker's acquisition of
controlling interests in five breweries in Nigeria from Sona Group in January 2011.
Sona System's two breweries in Ota and Kaduna, and life Breweries in
Onitsha have now become part of Nigerian Breweries Plc, together with the three
brands: Goldberg lager, Malta Gold and Life Continental lager.
In December 31st 2014, Nigerian Breweries Plc completed the merger with
Consolidated Breweries Pic which added the three breweries in Ijebu-ode,
Awomama and Makurdi to the company and also with the brands 33 Export Lager,
Williams Dark Ale, Turbo King Stout, More Lager, Breezer, Hi-malt and Maltex (the
first Nigerian malt drink).
In November 2015, Nigerian Breweries launched the international brand
Strongbow cider which makes it the first in Nigeria to produce and bottle the cider
category beverage.
Nigerian Breweries Plc now has ten operational breweries from which its products
are distributed to all parts of Nigeria, in addition to the malting plants in Aba and
Kaduna Nigerian Breweries also supports operations in Champion Breweries Plc,
Uyo.
49
3.3 POPULATION OF THE STUDY
The population of this research work is the staff of the Nigeria Breweries Pic.
The responses of the staff in the account and internal audit department of the
organization will give required information for use appraising the adoption of
International financial Reporting Standards in Nigeria.
3.4 RESEARCH DESIGN
A research design could be defined as a torchlight that illuminates the mind of
the researcher in his investigation efforts with the unknown. Research design could
also be used to show the method of data processing and presentation. According to
Osuola, (1994), a research design is the basic plan which will guide the data
collection and analysis phase of the research project. There are several types of
research design which involves; historical, experimental, survey method, case study
etc. Jegede (1990). However, the case study method was used for this study because
it is very useful in explanatory research study.
3.5 SAMPLING AND SAMPLING TECHNIQUES
The sample size of this research is selected from the staff of the Nigerian
Breweries who constitutes the population of the study and using the Ibadan Plant
situated at Alakia as a case study. A total number of fifty (50) respondents were
selected randomly and served with questionnaires to fill. The technique the
researcher employed in gathering data in this research study is simple random
sampling method.
50
3.7 RELIABILITY AND VALIDITY OF RESEARCH INSTRUMENT
Validity can be defined as the extent to which the survey instrument acts as
an accurate predictor. Validity involves the degree to which the questionnaire as
regards the study measures accurately what is supposed to be measured. According
to "show and Wright (1991), there are four general procedures for estimating the
validity of a questionnaire.
These are:
Content Validity: This involves assessing the adequacy of the responses
elicited by the instrument.
Predictive Validity: This involves assessing the extent to which they obtained score
may be sued to estimate an individual's future standing with respect to the criterion
variability.
Construct Validity: This involves understanding the meaning of the obtained
measurement, understanding the factors that underline the obtained measurement.
Concurrent validity: This involves assessing the extent to which the obtained score
may be sued to estimate an individual present standing with respect to some other
variables. For the purpose of this study, content validity was used. This means the
extent to which respondents understand the research questions.
3.8 DATA COLLECTION PROCEDURES
Like most research, two sources of data collection were employed in this research
study the primary and the secondary data which are collected for the purposes for
51
which they are needed.
a. The primary data: The use of primary data means data collected specially
for the research work needed at hand and it involves data which are not available in
published form or in the department's records, the bulk of data used in this project
work comes from primary data which was generated through questionnaire
administration. The questions were structured and respondent's opinion were
gathered and recorded.
b. The secondary data: This refers to existing published information which
may be useful for the purpose of specific survey. The sources are journals, text
books, seminar papers, articles, magazines, company documents and related
publications.
3.9 METHOD OF DATA ANALYSIS
The method of data analysis used for this study was descriptive statistical method
were tables and simple percentages will be sued to analysis the information in the
questionnaire supplied by the respondents so as to allow accuracy and easy
recording of information, and on this basis, the discussion of findings shall be made.
The Chi square analysis will be employed to test the hypothesis.
52
CHAPTER FOUR
4.0 DATA ANALYSIS, FINDINGS AND DISCUSSION
4.1 FINDINGS OF THE STUDY
This chapter discussed the findings in respects of the objectives of the study
as set out in chapter one of this work. Also, it seeks to analysis the data gathered
from an unbiased questionnaire drafted and circulated for the purpose of the study
among members of staff of Nigeria Breweries Plc in relation to their views on the
subject of study.
Furthermore, fifty (50) questionnaires were administered to selected staff of
Nigerian Breweries Plc, Ibadan Plant, Alakia out of which 42 were returned and
used for presentation and analysis
Specifically, only those relevant to the research question shall be analysed,
the data collected for this study.
Table 4.1 Sex Distribution of Respondents
Variable Frequency Percentage (%)

Male 29 69
Female 13 31
Total 42 100%
Source: Research survey (2018)
Table 4.2 Age Distribution of Respondents

Below 25 years 9 21
25 - 35 years 13 31
Above 35 years 20 48
Total 42 100
53
From the table above 21% of the respondents were below the age of 25 years, 31%
between 25 - 35 years while the remaining 20 respondents, representing 48% are
above 35 years.
Table 4.3 Marital of respondents

single 15 36
Married 27 64
Total 42 100%
From the above, 36% (15) of the respondents were single while, 27, representing
64% were married.
Table 4.4 Qualification of respondents

WASSCE/Equivalent 6 14
OND/NCE 17 40
BSC/HND 15 36
MSC/MBA/PHD 4 10
Total 42 100
From the table above, 14% of the respondents were WASSCE Holders, 40% were
OND/NCE holders, 36% were BSC/HND holders while the remaining 4 respondents,
representing 10% have MSC/MBA/PHD qualified.
Table 4.5 Professional Qualification of respondents

AAT 6 14
ACA 8 19
54
ANAN 5 12
OTHERS 23 55
Total 42 100
From the table above, 14% of the respondents have AAT, 19% have ACA, 12% have
ANAN while the remaining 23 respondents, representing 55% have other
professional qualifications not mentioned.
Table 4.6. Management Position of Respondents

Senior Level Management 5 12
Middle Level Management 14 33
Low Level Management 23 55
Total 42 100
From the table above, 12% of the respondents were senior level managers, 33%
were middle level managers while the remaining 23 respondents, representing 55%
were low level managers (junior staffs).
Table 4.7 Work experience of Respondents

Less than 5 years 14 33
5-10 years 9 21
10-51 years 9 21
Above 15 years 10 25
Total 42 100
From the table above, 33% of the respondents have less than 5 years experience,
21% have 5 -10 years experience, 21% have 10 - 15 years experience while the
55
remaining 10 respondents, representing 25% have above 15 years' experience
Table 4.8 IFRS brings about convergence of national accounting standard

Strongly Agreed (S.A) 29 68
Agreed (A) 11 27
Strongly Disagree (SD) 0 0
Disagreed (D) 2 5
Total 42 100
From the above, 68% of the respondents strongly agreed that IFRS brings about
convergence of national accounting standard, 27% while the remaining 5%
disagreed.
Table 4.9 IFRS makes financial statements to give true and fair view of an
organization

Agreed (A) 13 32
Disagreed (D) 10 22
Total 42 100
From the above, 32% of the respondents strongly agreed that IFRS enables financial
statements to give true view of an organization, 32% agreed, 14 strongly disagreed
while the remaining 22% disagreed.
Table 4.10 IFRS brings about convergence of national accounting
56
standard

Agreed (A) 14 33
Disagreed (D) 10 24
Total 42 100
The table above shows that 26% of the respondents strongly agreed that the
introduction of IFRS make participant in the capital markets to understand financial
statement, 33% strongly agreed, 17% strongly disagreed while the remaining 24%
do not agreed with the statement.
Table 4.11 There is need to train the educators soa s to be abreast with the
IFRS

Agreed (A) 13 31
Disagreed (D) 9 26
Total 42 100%
The Above Table Shows That 28% Of The Respondents Strongly Agreed That There
is need to train the educators so as to be abreast with the IFRS, 31% 18% strongly
disagreed while the remaining 23% disagreed.
Table 4.12 Public companies can achieve rapid growth and development if
they comply with IFRS
57
Agreed (A) 11 27
Disagreed (D) 4 9
Total 42 100%
The above table shows that 64% of the respondents strongly agreed that public
companies can achieve rapid growth and development if they comply with IFRS
regulation, 27% agreed while the remaining 9% disagreed.
Table 4.13 The adoption of IFRS in Nigeria is the key to economic growth and
development.

Agreed (A) 21 50
Disagreed (D) 6 14
Total 42 100%
From the table, 10% of the respondents strongly agreed that the adoption of IFRS in
Nigeria is the key to economic growth and development, 50% agreed, 26% strongly
disagreed while the remaining 6 respondents, representing 14% disagreed.
Table 4.14 IFRS adoption leads to profitability of manufacturing company

Agreed (A) 19 45
Disagreed (D) 10 22
Total 42 100%
58
From the table above, 27% of the respondents strongly agreed that IFRS adoption
leads to profitability of manufacturing company, 45% agreed, 4% strongly disagreed
while the remaining 24% representing 10 of the respondents disagreed
Table 4.15 Adoption of IFRS will enhance capital market performance and
lead to global business expansion in Nigeria.

Agreed (A) 19 46
Disagreed (D) 8 18
Total 42 100%
The table above shows that 36% of the respondents strongly agreed that the
adoption of IFRS will enhance capital market performance and lead to global
business expansion in Nigeria, 46% agreed, while the remaining 8 respondents,
representing 18% disagreed
Table 4.16 IFRS can enhance comparability of financial reporting across the
global.

Agreed (A) 14 33
Disagreed (D) 7 17
Total 42 100%
From the above table, 48% of the respondents strongly agreed that IFRS can
enhance comparability of financial reporting across the global, 33% agreed, 2%
59
strongly disagreed while the remaining 17% disagreed.
Table: 4. 17 Having a single set of internationally acceptable reporting
standards will eradiate the need for restatement of financial statement

Agreed (A) 13 32
Disagreed (D) 2 5
Total 42 100%
The above table shows 45% of the respondents strongly agreed that having a single
set of internationally acceptable reporting standards will eradicate the need for
restatement of financial statement, 32% agreed, 18% strongly disagreed while the
remaining 2 respondents, representing 5% strongly disagreed.
Table: 4.18 Having a single set of internationally acceptable reporting
standards will eradiate the need for restatement of financial statement

Agreed (A) 5 11
Disagreed (D) 12 28
Total 42 100%
The above table shows 45% of the respondents strongly agreed that having a single
set of internationally acceptable reporting standards will eradicate the need for
restatement of financial statement, 32% agreed, 18% strongly disagreed while the
remaining 2 respondents, representing 5% strongly disagreed.
60
Table 4.19 The benefits of adopting IFRS outweighs the cost of adoption

Agreed (A) 7 17
Disagreed (D) 19 46
Total 42 100%
The above table shows 25% of the respondents strongly agreed that the benefit of
adopting IFRS outweighs the cost of adoption, 17% agreed, 12% strongly disagreed
while the remaining 19 respondents, representing 46% strongly disagreed.
Table 4.20 IFRS is not appropriate in developing and emerging economics

Agreed (A) 13 31
Disagreed (D) 16 37
Total 42 100%
The above table shows 25% of the respondents strongly agreed that IFRS is not
appropriate in developing and emerging economics, 17% agreed, 12% strongly
disagreed while the remaining 19 respondents, representing 46% strongly
disagreed.
4.2 TESTING OF HYPOTHESIS
This section covers the testing of the hypothesis stated in chapter one of this
research work. The chi square test will be employed in testing the hypothesis. The
formula has been stated in chapter three.
61
4.2.1 HYPOTHESIS ONE
H0: There is no significant benefit to be derived from the adoption of IFRS in Nigeria
H1: There is significant benefit to be derived from the adoption of IFRS in Nigeria is
the key to economic growth and development"

Agreed (A) 21 50
Disagreed (D) 6 14
Total 42 100%
Chi-square = (X2) cal = Σ(OE)2

E
TO GET e BY FORMULA = 42/4 = 10.5
0 E O-E (0-2)2
E
4 10.5 -6.5 4.0238
21 10.5 10.5 10.5
11 10.5 10.5 0.0238
6 10.5 -4.5 1.9286
16.4762
:- x2 cal = 16.4762
Level of significance = 5% =5/100 = 0.05
Degree of freedom = k-l = 4-l=3
3x 0.05 = 7.815
:- x2 tab = 7.815
Decision Rule: Reject Ho if x2 cal > x2 tab and accept if otherwise.
Based on the above, the null hypothesis (HO) is rejected the alternative hypothesis
62
(H1) is accepted because the x2 cal (16.4762) is greater than the x2 tab (7.815).
Therefore, there is significant benefit to be derived from the adoption of IFRS in
Nigeria.
4.2.2 HYPOTHESIS TWO
Ho: There is no significant relationship between IFRS adoption and the profitability
of manufacturing company
Hi: There is relationship between IFRS adoption and the profitability of
manufacturing company
Question 15 will be sued to test the above stated hypothesis "IFRS" adoption leads
to profitability of manufacturing company"

Agreed (A) 19 45
Disagreed (D) 10 24
Total 42 100%
Source: Research Survey (2018)
Chi-square = (X2) cal = Σ(OE)2

E
TO GET e BY FORMULA = 42/4 = 10.5
0 E O-E (0-2)2 (0-2)2

E
11 10.5 0.5 0.25 0.0238
19 10.5 8.5 72.25 6.8810
2 10.5 -8.5 72.25 6.8810
10 10.5 -0.5 0.25 0.0238
63
13.8104
:- X2 cal = 13.8104
Level of significance = 5% = 5/100 = 0/05
Degree of Freedom = k-1 = 4-1=3
3x 0.05 = 7.815
:- X2 tab = 7.815
DECISION RULE: Reject Ho if x2 cal>X2 tab and accept if otherwise
Based on the above, the null hypothesis (H o) is rejected the alternative hypothesis
(Hi) is accepted because the X2 cal (13.8104) is greater than the X2 tab (7.815)
Therefore, there is relationship between IFRS adoption and the profitability of
manufacturing company.
64
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 SUMMARY
The study was all about the concepts and issues of International Financial
Reporting Standards (IFRS) adoption by corporate organizations in Nigeria. This
research is based on data obtained from survey and literature in the context of
worldwide convergence, compliance and adoption processes of IFRS. The article
also compares the Nigerian GAAP and IFRS. There is high compliance in adoption
particularly by financial institutions and other corporate bodies with little hitches.
Recommendations were made amongst which are: provision of proper guidelines on
implementation and introduce awareness programme to improve the degree of
compliance.
The study focused on the adoption process of International Financial
Reporting Standards (IFRS) on a developing economy, with particular reference to
Nigeria. The paper is based on the data obtained from literature survey and archival
sources in the content of the globalization of International Financial Reporting and
the adoption of International Financial Reporting standards (IFRS). Nigeria has
embraced IFRS in order to participate in the benefits it offers, including attracting
foreign direct investment, reduction of the cost of doing business, and cross border
listing. In implementing IFRS Nigeria will face challenges including the development
of a legal and regulatory framework, awareness campaign, and training of
65
personnel. Recommendations were made to forestall such challenges which include
strengthening education and training, establishment of an independent body to
monitor and enforce accounting and auditing Standards.
Notwithstanding, the benefits of IFRS, its adoption demands a new set of
skills and expertise, transitional challenges such as change management
bottlenecks, inconsistencies in applicable laws, emerging technical areas and
terminologies, frequent reviews of standards, cost verses benefit analysis and
higher demand for auditors as well. These challenges are more evident in small
scale businesses in developing countries like Ghana and Nigeria. That is, the
implementation of IFRS has the need of training and in-depth knowledge since the
standards are principle based. Technical capacity of regulators, preparers, auditors
and users of financial statements is a necessity. Also, there is the need of strong
ethical and good corporate governance system.
Additionally, standards such as accounting for government grants and
disclosure of government assistance, borrowing cost, impairment of assets,
intangible assets, financial reporting in hyperinflationary economies, first time
adoption of international financial reporting standards, non-current assets held for
sale and discontinued operations, accounting and reporting by retirement benefit
plan, share based payments, events after reporting date, related party disclosure
and accounting for Agriculture that were not available are fully catered for in the
IFRS.
66
5.2 CONCLUSION
In this paper we have been able to explore the informational value of financial
statements under the IFRS. Globalization and Information and Communication
Technology (ICT) has made it possible to share financial information globally hence
investors can invest in any part of the globe. We also established the need for
uniformity in financial reporting which is the main objective of IFRS. Finally, we
were able to identify some of the challenges that Nigeria is likely to face in adopting
IFRS and proffered solutions which if implemented will ensure seamless transition
to IFRS.
This purpose of this paper is to bring out issues and concepts of IFRS in
general and its relationship to corporate business. There is high degree of
compliance and adoption by financial institutions and other corporate body in
Nigeria. In a survey conducted by state that companies are complying because of
penalty prescribed by the regulatory body for non-implementation. "Reference
(19)" identifies that there will be more multinational participation in the country
that has adopted. There will be standardization of accounting information and
uniformity all over (20). Although, the challenges of adoption in Nigeria is the high
cost, where personnel need to be trained and even the effect on taxation and profit
level as a result of adoption in Nigeria.
67
5.3 RECOMMENDATIONS
Based on the findings and discussions above, the following recommendations
are made:
1. The curricula of tertiary institutions should be reviewed to incorporate
IFRS so that our accountants and auditors will be conversant with IFRS
guidelines and standards.
2. There should be a linkage programme between the NASB, in conjunction
with the NUC and professional accounting bodies as to design a
programme for fast tracking the teaching and learning of IFRS in Nigeria
tertiary institutions, so as to equip graduate of accounting with the
required skills and knowledge to meet the expected surge in the demand
for IFRS professionals.
3. In order to achieve effective training and capacity building needed for
effective implementation of IFRS, and IFRS centre of excellence should be
established. That is training should entirely dedicated to the teaching and
learning of IFRS, so that classroom sessions are blended with real life
situations.
4. Website on IFRS and related matters on a repository of information as it
relates to financial reporting or solutions to issues relating to SAS should
be encouraged by the government.
5. A "train the trainer" programme should also be recommended for lectures
68
in tertiary institutions. The lecturers of these accounting graduates should
also be exposed on the current trend of IFRS in the tertiary institutions in
Nigeria, so that they will be able to inculcate the ideas of knowledge of
IFRS to the recipients. For one to impart knowledge, one has to be
knowledge.
6. Introduction of awareness programmes for improving the degree of
compliance with IFRS requirements
7. Provide guidelines on proper implementation of IFAC code of ethics
for professional accountants and practitioners
8. The government should amend the company ACT in Nigeria for improving
compliance culture.
9. Academic, professional, and education curriculum should inculcate IFRS.
69
REFERENCES
Adam, M. (2009) Nigeria Banks: The challenges of Adopting International Financial
Reporting Standards, Zenith Economic Quarterly Vol.4 No2 (April, Pp. 1726).
Azobi, C (2017), Preparation of financial statements: challenges of Adopting IFRS
and lPSA. Being a paper presented at ICAN interactive season for
Accountants in education on March Lagos 18-10
Azobi, C. (2010). Preparation of Financial Statements: Challenges of adopting IFRS
and IPSAS. Being paper presented at ICAN Interactive Session for
Accountants in Education (Lagos, March 8).
Egwuonwu, P. (2017). Financial reporting the theoretical and Regulatory
framework(2nd .ed) Lagos Oladimeji Publisher LTD
Ejike, S.I, (2012). Adoption of international, financial reporting standards to enhance
Corporate Governance in Nigeria. Being a seminal / paper presented to the
Department of Accountancy, Ebony I state University, Abakaliki, 8-15
Fowokan, T. (2017) IFRS Adoption in Nigeria: Tax implications. A paper presented
at CITN seminar on IFRS Adoption in Nigeria 4-10
Egwuonwu, P. (2017). Financial reporting the theoretical and Regulatory
framework (2nd .ed) Lagos Oladimeji Publisher LTD
Fowokan, T. (2017) IFRS Adoption in Nigeria: Tax implications. A paper presented
at CITN seminar on IFRS Adoption in Nigeria 4-10
Garuba, A.O And P. Donwa (2017). The challenges of Adopting international
70
financial Reporting system in Nigeria JORIND I(9);313-317
International federation of Accountants (2004): Challenges and success in
implementing International Financial Standards: Achieving Convergence to
IFRSs and ISAs New York.
Izedonrni, F. (2010): Preparation of Financial statements: challenges of Adopting
IFRS and IPSAS Being paper presented at ICAN interactive Session for
accountants in Education (Lagos, March 8)
Kappler (1997) Nigeria Accounting standards Board (2012) Report of the
committee on Road Map to the Adoption of international financial Reporting
standards in Nigeria.
Mongiello, M. (2009): International Financial reporting: Download Free textbooks at
BOOKBOON .Com
Nwakaeze, E. (2010). Olamide. F. (2010). Audit Quality corporate Governace and
firm Characteristics in Nigeria. International Journal of Business
Management December, 5(5) 10-15
Orijioke, B (2002). Corporate Governance in Nigeria Journal of Association of
National Accountants of Nigeria, 2 (2), 5-8.
Standard and Poor (2007) IFRS Beyond Transition. Credit Week, Vol. 27, No. 5, 31st
January.
Umoru, H and S.I small. (2010, Jan) Nigeria to Adopt International Financial
Reporting Standards Vanguard 6th September p.26
71
APPENDIX I
LADOKE AKINTOLA UNIVERSITY OF TECHNOLOGY

FACULTY OF MANAGEMENT SCIENCES
DEPARTMENT OF MANAGEMENT & ACCOUNTING
Dear Sir
QUESTIONNAIRE ON THE BENEFITS AND CHALLENGES OF INTERNATIONAL
FINANCIAL REPORTING STANDARD (IFRS) ADOPTION BY A LISTED COMPANY
(A CASE STUDY OF NIGERIA BREWERY PLC, IBADAN)
This study is in partial fulfilment of the requirements for the award of Bachelor of
Science in Accounting. Please kindly assist by answering the attached questions with
appropriate answers by ticking  among the alternatives provided.
Any information given by you will be however be treated with strict confidentiality
for academic purpose only.
Thank you for your anticipation cooperation.
72
SECTION A: PERSONAL INFORMATION
1. Sex: Male ( ) Female ( )
2. Age: Below 25 year ( ) 25-30year ( ) above 35 years ()
3. Marital status: Single ( ) Married ( )
4. Qualification WASSCE or Equivalent ( ) OND/NCE ( )
BSC/HND( )MSC/MBA.PHD ( )
5. PROFESSIONAL AAT ( ) ACA ( ) ANAN ( ) Others ( )
6. Management Position: Senior Level Management( )
Middle Level Management ()
Low Level Management ( )
7. Work Experience Less than 5 years ( ) 5 - 10 ( )
10 - 15 years ( ) Above 15 years ( )
SECTION B: QUESTIONS RELATING TO THE BENEFITS AND CHALLENGES OF
INTERNATIONAL FINANCIAL REPORTING STANDARD (IFS) ADOPTION
BY A LISTED COMPANY
Key: SA : Strongly Agreed
A: Agreed
SD: Strongly Disagreed
D: Disagreed
73
S/N A SA D SD
8 IFRS brings above convergence of national accounting
standard
9 IFRS are designed for adoption by profit oriented entities
10 IFRS makes financial statements to give true and fair view of an
organization
11 The introduction of IFRS make participant in the capital market
to understand financial statement

12 There is need to train the educators so as to abreast with the
IFRS
13 Public companies can achieve rapid growth and development if
they comply with IFRS regulation

14 The adoption of IFRS in Nigeria is the key to economic growth
and development.
15 IFRS adoption leads to profitability of manufacturing company
16 Adoption of IFRS will enhance capital market performance and
lead to global business expansion in Nigeria

17 IFRS can enhance comparability of Inancial reporting
across the global

18 Having a single set of internationally acceptable reporting
standards will eradicate the need for restatement of financial
statement
19 IFRS adoption could make it less costly for investors to
compare firms across markets and countries

20 The benefit of adoption IFRS outweighs the cost of adoption
21 IFRS are not appropriate in developing and emerging
economics
74
75

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PROJECT TITLE

THE BENEFITS AND CHALLENGES OF INTERNATIONAL FINANCIAL REPORTING

STANDARDS (IFRS) ADOPTION BY LISTED COMPANIES

(A CASE STUDY OF NIGERIA BREWERIES PLC, IBADAN).

thoughts for your own project.

PAGE, CERTIFICATION, APPROVAL, DEDICATION AND ACKNOWLEDGE

1.2 Background of the study

1.3 Statement of the problem

1.4 Objectives of the study

1.5 Research questions

1.6 Statement of Hypothesis

1.7 Scope of the study

1.8 Significance of the study

1.9 Justification of the study

1.10 Definitions of Terms

2.1 Conceptual Review

2.1.1 Development of accounting profession in Nigeria (Brief overview)

2.2 Theoretical Review

2.1 The rational utility maximization theory

2.2.2 Pure impression management model

2.3 Empirical Review

2.3.1 Benefits of adopting IFRS in Nigeria

2.3.2 Challenges to IFRS adoption in Nigeria

2.3.3 Benefits and challenges of the implementation of IFRS to economic

2.3.4 Requirements that will assist implementation of IFRS in Nigeria

2.4 Financial reporting regulations and regulators in Nigeria

2.4.1 Components of IFRS financial statements

2.4.3 Adoption statement of IFRS

2.4.4 Reasons for IFRS

3.0 Research Methodology

3.2 Area of Study

3.3 Population of the study

3.4 Research Design

3.6 Data collection procedure

3.7 Methods of data Analysis

4.0 Presentation and Analysis of Data

4.1 Analysis of questionnaire

4.2 Testing of Hypothesis

5.0 Summary, Conclusion and Recommendation

An acceptable global high international quality financial reporting standard

United States of America, United Kingdom, Mexico, Australia, Germany. France,

body was properly recognised in 2001 by the international accounting standards

board (IASB), and as well developed accounting standards and related

interpretations jointly referred to as the international financial reporting standards

The supremacy of IFRS further improved in September 2002, when the

work closely based on their agreement to develop high quality compatible

advanced in the IFRS - Us Generally Accepted Accounting principles (GAAP),

IFRS based on their need and ability to adopt. (Azobi, 2010).

disclosed that new accountancy system, the international financial reporting

Accounting to Ezeokoh (2011) as cited by Ejike (2012), financial reporting system

community in which it is located.

The board of directors is supposed to be accountable to shareholders in any

company for effective monitoring hence there must be an independent relationship

importance of introducing IFRS according to Fowokan (2011) are:

To develop a single set of high quality understandable and enforceable global

accounting standard that requires transparent and comparable information in

national accounting standards.

 To help participants in various capital markets (investors, stock brokers, etc)

across the globe to understand financial statements.

all together similar, through, there will be increased responsibilities in setting

practical implementation of IFRS requires adequate technical capacity among

preparers and unions of financial statements (auditors, accountants and regulatory

authorities). The fact remains to impact knowledge one must be knowledgeable.