ASSESSMENT OF THE LEVEL OF COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) AMONG LISTED COMPANIES IN NIGERIA
Adoption of IFRS have significantly led to greater consistency in recognition and measurement of accounting information but the burden of complying fully with the disclosure requirements is complex and impacting upon corporate financial reporting practices of listed firms across the globe. Many companies usually claim that their financial statements are prepared in accordance with IFRSs but the reality is different due to varying levels of compliance. These consequently affect the quality of financial information, limit the potential effect of IFRS and impair the ability of investors and other market participants from making rightful decisions. These motivate the study to assess the level of IFRS compliance among listed companies in Nigeria using both descriptive and qualitative analysis. 522 annual reports of 87 listed companies in Nigeria from 2012 to 2017 were analyzed descriptively. The qualitative data obtained through interview of 7 staffers of Financial Reporting Council of Nigeria, Nigerian Stock Exchange, Corporate Affair Commission and Listed companies in Nigeria were narratively analyzed. The finding of the study revealed that more than 70% (368 firms) of Nigerian listed companies achieved IFRS compliance score of below 49% while 27% (41 firms) achieved between 50% to 59% compliance score and only 2% (13 firms) achieved compliance score of above 60%. The overall compliance index score ranged from 6% to 66% with average mean compliance score of 41%. However, the qualitative finding revealed that a misconception between the use of the IFRS adoption and IFRS compliance. The study concluded that IFRS compliance is very low and differences existed in the level of compliance among listed companies in Nigeria. Therefore, the study recommends that standard setter must clarify the difference between IFRS adoption and IFRS compliance.
