INTERNATIONAL FINANCIAL REPORTING STANDARD ADOPTION AND EARNINGS MANAGEMENT IN NIGERIAN QUOTED COMPANIES

In this study, the researcher investigated the effects of IFRS adoption on earnings management in Nigeria. The effects of IFRS adoption has been a serious concern in financial accounting literature. This study used a sample of 68 non-financial quoted companies in Nigeria that has consistently published their audited annual financial report between 2009 and 2013. In analyzing the collected data the study adopted descriptive statistics, correlation analysis and a panel multiple regression data analysis to identify the possible effects of IFRS adoption on general earnings management and also on income-increasing and decreasing earnings management in Nigeria. The study found that IFRS adoption in Nigeria does not significantly affect the tendency of Nigeria companies to manipulate earnings generally. The study also found that Nigerian companies do not significantly practice income-increasing or decreasing earnings management activities after their adoption of IFRS. This study also found that big-4 auditors and firm size do not sufficiently create a situation where IFRS adoption affected earnings management. Therefore, it is recommended that other factors such as the institutional, cultural as well as good corporate governance practices should be taken into the consideration when implementing IFRS in Nigeria. Unlike some other countries where IFRS adoption affected investors’ confidence due to the increased tendencies of companies in those countries to manipulate their earnings, analyst and investors should rely on the reported earnings of Nigerian companies under IFRS. This study also recommended that further research be conducted in this area to improve on the findings and to provide more empirical evidence on other variables not used in our model.