ProjectClue.com WhatsApp or Call Us

projectclue whatsapp icon07030248044

Project Topic:

AN EXAMINATION OF PRACTICAL IMPLICATIONS OF INTERNATIONAL FINANCIAL REPORTING STANDARDS IN NIGERIA SINCE ITS ADOPTION (A CASE STUDY OF SELECTED ACCOUNTING FIRMS IN KWARA STATE)

Project Information:

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 80 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   1,870 people found this useful

Project Department:

ACCOUNTING UNDERGRADUATE PROJECT TOPICS, RESEARCH WORKS AND MATERIALS

Project Body:

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

In the past few years, many developed and developing countries have adopted International Financial Reporting Standards (IFRS). This is because, globalization of capital market requires a unified global accounting reporting and disclosure set of standards, as a result of increasing volume of cross border capital flows and the growing number of foreign direct investments via mergers and acquisition in the globalization era, the need for the harmonization of different practices in accounting and the acceptance of worldwide standards has arisen. This worldwide standard is International Financial Reporting Standards(IFRS, 2001).

On 28th July 2010, the Nigerian Federal Executive Council approved 1stJanuary 2012 as the effective date for the convergence of accounting standards in Nigeria with IFRS. On 3rd September 2010, the Nigeria Accounting Standards Board (NASB) announced a staged implementation of IFRS, as follows: Publicly listed entities and significant public interest entities are expected to implement IFRS by 1stJanuary 2012, other public interest entities are expected to implement IFRS by 1stJanuary 2013 and Small and medium-sized are expected to implement by 1st January 2014. (IASplus, 2012)

However, since the convergence of International Financial Reporting Standards(IFRS) in Nigeria, Nigeria is faced with a lot of implications toward its adoption (Akhidime, A.E. and Ekiomado, E.B, 2014). This study intends to unveil the practical implications of the adoption of International Financial Reporting Standards (IFRS) with specific reference to Nigeria.

1.2       Problem Statement

The implication of the adoption of International Financial Reporting Standards (IFRS) in Nigeria is a burning concern in accounting and financial literatures. Since Nigeria announced its decision to adopt IFRS, there have been concerns about the practical implications of applying the standards in preparation of financial statements. The accounting profession has long recognised the need for a harmonised accountancy framework (Harding 1999). Scholars have argued that the globalization of IFRS will result in a common language to financial statement prepared in different parts of the world.

              In the view of Nobes and Parker (2008), if a number of accountants from different countries or the same country are given the same transactions from which to prepare a financial statement they will not produce identical statement. Application of accounting standards is affected by unique cultural factor of the country in which the standards are applied (smith 2008).  Scholars such as Saudagaran (2001) and Dunn(2002) have examined the obstacles to harmonization of accounting to include cultural barriers. As a consequence, financial reports across countries may not be comparable despite adoption of IFRS. Hence, this study intends to isolate the role of culture in practicability of IFRS adoption in Nigeria.

          Under the inventory valuation, the FIFO (First-In-First-Out) inventory accounting methods has received scrutiny over the years. According to Dumont (2015) Last-in-First-out (LIFO) is not allowable for tax purpose in Nigeria. The method allows firms to understate their net income and thus pay less in tax. Under IFRS, LIFO would be banned and firms will have to report using First-in-First-out (FIFO) inventory valuation method. During inflationary period profits are higher under FIFO resulting in higher tax liabilities for firms when prices are increasing (Kinney&Rood, 2008). Whether or not, the valuation methods adopted by firms in the era of IFRS matters. Hence the need to obscure the practicability of IFRS adoption with regards to the valuation methods.

      Considering the companies’ effective tax rate, Deloitte has indicated that the adoption of IFRS will lead to tax complications. Since IFRS change the way net income is calculated which affects companies’ effective tax rates. For instance, IFRS definition of equity eliminates tax benefits for hybrid instruments. Hybrid instruments are equity such as ’’interest that is treated as dividends’’ (Deloitte, 2008). IFRS also alters the items allowed to be deducted in calculating net income; highly leveraged subsidiaries may be denied interest deductions in certain jurisdiction. IFRS will also alter assets values and associated depreciation, amortisation and other deductions. Consequently, it causes a change in tax liabilities (Deloitte, 2008). Practically in Nigeria, how has the tax authorities perceived the impact of IFRS on the revenue they generate?

1.3       Research Questions

The study attempts to provide answers to the following questions:

  1. How does cultural peculiarity affects the practicability of IFRS adoption in Nigeria?
  2. What effects does inventory valuation have on the practicability of IFRS adoption in Nigeria?
  3. To what extents does the companies’ effective tax rate affects the practicability of IFRS adoption in Nigeria?

1.4       Research Objectives

The main objective of this study is to examine the practical implications of the adoption of IFRS in Nigeria. The specific objectives are:

  1. To examine the extents to which cultural peculiarity affects the practicability of IFRS adoption in Nigeria.
  2. To assess the effects of inventory valuation on the practicability of IFRS adoption in Nigeria.
  3. To evaluate the impact of companies’ effective tax rate on the practicability of IFRS adoption in Nigeria.

1.5       Research Hypotheses

Based on the research questions and objectives, the following hypotheses were formulate

Hypothesis One                                                                                 

H0: Cultural peculiarity has no significant effects on the practicability of IFRS adoption in Nigeria.

H1:  Cultural peculiarity has significant effects on the practicability of IFRS adoption in Nigeria.

Hypothesis Two

H0: Inventory valuation has no significant effects on the practicability of IFRS adoption in Nigeria.

H1: Inventory valuation has significant effects on the practicability of IFRS adoption in Nigeria.

Hypothesis Three

H0: Companies’ effective tax rate has no significant impact on the practicability of IFRS adoption in Nigeria.

H1: Companies’ effective tax rate has significant impact on the practicability of IFRS adoption in Nigeria.

1.6       Significance of the Study

This study intends to contribute to literature by providing empirical evidence on the practical implications of IFRS adoption in Nigeria. It will provide beneficial outcomes to accounting researchers, policy makers as well as practioners. It will contribute to the existing studies about the adoption of IFRS particularly in the area of the practical implications of its adoption. Most research outputs usually ignore the process of its adoption as few research works exists on it. They normally look at the effects of IFRS on a number of variables. This study will serve as a theoretical basis for IFRS adoption and its practicability around the globe.

 Policymakers will benefits from the study as it provides them with empirical answers which may support future decisions regarding the reforms of financial statement. Researchers in the academia and corporate environment will find this study intriguing as it encourages more empirical researchers on IFRS adoption and implications in Nigeria. Investors, financial analyst, accountants and auditors will find this study worthwhile in the documentation of accounting records, financial records preparation and decision making process. Government will also benefits from this study as it provides information about the practical implications of the adoption of international financial reporting in Nigeria so as for them to be able to take corrective actions. In addition, this study serves as a body of reserved knowledge to be consulted by students to conduct research on the subject area.

1.7       Scope of the Study

This study focused on the examination of practical implications facing the adoption of International Financial Reporting Standards (IFRS) in Nigeria. However, it will be difficult to examine all sectors of Nigeria economy. This study therefore focuses in respondents from accounting practitioners in Ilorin, kwara State with specific attention to some of the practical implications of IFRS adoption.

1.8       Definition of Terms

Adoption: Adoption implies that national rules are set aside and replaced by IFRS requirement. Adoption of IFRS means full scale usage of IFRS without any variation.

Convergence: Convergence means the process of bringing together International Standards issued by IASB and existing standards issued by national standard setters, with the aim of eliminating alternatives in accounting for economic transactions and events (Odia and Ogiedu, 2013).

Examination: An exercise designed to examine progress or test or qualification or knowledge. The act of being examined.

IFRS: Means International Financial Reporting Standards. It represent a unified global commitment to developing a single set of high quality, globally accepted accounting standards whose aim is to provide transparent and comparable information that is in public interest through general purpose financial statements (Herbert, 2010). IFRS are a set of International Accounting Standards(IAS) stating how particular types of transactions and other events should be reported in financial statements.

NASB: The Nigerian Accounting Standards Board is now known as Financial Reporting Council of Nigeria (FRCN). FRCN is the only recognized independent body in Nigeria responsible for the development and issuance of statement of Accounting Standards for users and preparers of financial statements, investors, commercial enterprises and regulatory agencies of government

Practical Implications: Are the outcome results that occurs when specific events takes place. “Practical” applies to actual results while an “implication” refers to logical connection between the condition and outcome.

Get the complete project »


Instant Share On Social Media:


Can't find what you are looking for?
Call (+234) 07030248044.

OTHER SIMILAR ACCOUNTING PROJECTS AND MATERIALS

A COMPARATIVE ANALYSIS OF COMPUTERIZED ACCOUNTING SYSTEM AND MANUAL ACCOUNTING SYSTEM

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 72 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   4771 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY Accounting system according to an Italian monk, Luca Pacioli (1491), is the combination of personnel records and procedures that a business uses...Continue reading »

A COMPARATIVE ANALYSIS OF COMPUTERIZED ACCOUNTING SYSTEM AND MANUAL ACCOUNTING SYSTEM

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 70 ::   Attributes: Questionnaire, Data Analysis, Abstract

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY Accounting system according to an Italian monk, Luca Pacioli (1491), is the combination of personnel records and procedures that a business uses...Continue reading »

A COMPARATIVE ANALYSIS OF COMPUTERIZED ACCOUNTING SYSTEM AND MANUAL ACCOUNTING SYSTEM (A Case Study Of Ama Breweries Plc. Eke, Udi L.G.A And Africa Petroleum Plc Presidential Road)

 Format: MS WORD ::   Chapters: 1 - 5  ::   Pages: 87 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   12773 engagements

ABSTRACT This research study is a comparative analysis of computerized accounting system and manual accounting system with reference to Ama breweries plc. and African petroleum plc. all in Enugu state...Continue reading »

A COMPARATIVE ANALYSIS OF COMPUTERIZED ACCOUNTING SYSTEM AND MANUAL ACCOUNTING SYSTEM (A study of Ama breweries Plc. and Africa petroleum Plc)

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 72 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   3652 engagements

ABSTRACT This research study is a comparative analysis of computerized accounting system and manual accounting system with reference to Ama breweries plc. and African petroleum plc. all in Enugu stat...Continue reading »

A COMPARATIVE ANALYSIS OF COMPUTERIZED ACCOUNTING SYSTEM AND MANUAL ACCOUNTING SYSTEM (A study of Ama breweries Plc. Eke, Udi L.G.A and Africa petroleum Plc Presidential road)

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 67 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   2900 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY Accounting system according to an Italian monk, Luca Pacioli (1491), is the combination of personnel records and procedures that a business uses to...Continue reading »

A COMPARATIVE ANALYSIS OF EARNING QUALITY BEFORE AND AFTER ADOPTION OF IFRS IN NIGERIA (A CASE STUDY OF MONEY DEPOSIT BANKS ABUJA)

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 80 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   3884 engagements

CHAPTER ONE INTRODUCTION BACKGROUND OF THE STUDY The purpose of International Financial Reporting Standard (IFRS) is to ensure high degree of transparency and comparability of financial statements....Continue reading »

What are looking for today?

WHAT OUR CUSTOMERS ARE SAYING:
  • 1. Abubakar Sani from Nigerian Investment Promotion Commission said "I had a wonderful experience using ProjectClue, they delivered not only on time, but the content had good quality. I recommend ProjectClue for any project research work.".
    Rating: Excellent
  • 2. Ogunniran Olawale from Ekiti state university said "Projectclue is really safe and reliable Quick access to project works Nice customer service Fast delivery of request Recommend this toy fellow students ".
    Rating: Excellent
  • 3. Fahat Nasir from isa kaita college of education dutsinma said "Fish farming a solution unemployment ".
    Rating: Very Good
  • 4. Ajimbi Oluwarotimi from Theology school osun said "Good ".
    Rating: Very Good
  • 5. Clement Abdullahi Ogiji from National Open University of Nigeria said "I am a living witness and have recommended project clue to a lot of students, so far none have been disappointed, very reliable and, trustworthy and dependable".
    Rating: Excellent
  • 6. Jhuee from Sultan national high school said "Good quality. I recommend project clue for any project research work.".
    Rating: Excellent