International Financial Reporting Standards (IFRS) adoption and quality of accounting information of selected listed manufacturing firms in Nigeria

Abstract

This study investigates if the adoption of IFRS has improved the quality of accounting numbers provided in the financial statements of firms in Nigeria. The essence is to confirm the results of previous studies as well as the introduction of new variables. The study uses secondary balanced panel data obtained from the Nigerian Exchange Group on 27 selected manufacturing firms over the periods 2006-2011 for pre-IFRS and from 2012-2017 for post-IFRS. The dependent variable is market share price (MPS), and the independent variables are BVPS, EPS, CFPS and PE, while LEV and SIZE are the control variables. The regression results of the Estimated Generalized Least Squares (EGLS) indicate that for pre-IFRS periods, while three variables are positively significant, four of the variables of interest are positively significant in post-IFRS periods. The overall results of the hypotheses tests show that there is a higher quality of accounting information after the adoption of IFRS for the periods under review. The results give signals to investors that post-IFRS information has higher value relevance than pre-IFRS. The study recommends among others that manufacturing firms should continue to adopt IFRS in order to maximize its influence on their stock prices.