Efforts and challenges in adopting international financial reporting standards (IFRS) in Nigeria

Abstract

Financial reporting in emerging and developed economies has been a challenging

debate, due to the frequent changes as well as updates on accounting rules and

regulations. Nigeria, being an emerging economy has witnessed a dramatic change

and improvement on the accounting reporting since after political development of

the country in 1960. The establishment of Nigerian Security Exchange (NSE) in 1982

and the establishment of Nigerian Accounting Standard Board (NASB) in 1984 by the

Institute

of Chartered Accounting of Nigeria (ICAN) who were the pioneer legislations

on the road map to financial reporting in Nigeria. Even though laws and regulations

were also issued by the regulatory bodies in Nigeria to ensure quality(value relevance)

financia

l reporting, the level of compliance with the regulations have been very low

as reported by the World Bank in the 2004 and 2011(ROSC report). Subsequently,

professionals, regulatory bodies and government made the first effort by establishing

the road map a

nd the World Bank committee for the adoption of the International

Financial Reporting Standards (IFRS) in 2010. Secondly, the formation of the Financial

Reporting Council (FRC) in 2011 and FRC training institute in 2012. However, these

efforts by the gover

nment, World Bank and regulators were faced with the challenges on

the development of regulatory and legal framework as well as training of professionals

and regulators on the new accounting standard (IFRS). Therefore, this paper explores

two main issues:

(i) the efforts of government, professional bodies, and regulatory

agencies by providing accounting framework and trainings; and (ii) challenges in

adopting IFRS due to weaknesses of SAS and unethical behaviours of the preparers of

financial statements.