Research Article

MANDATORY ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS AND VALUE RELEVANCE OF ACCOUNTING INFORMATION IN THE NIGERIAN FINANCIAL FIRMS

Mohammed Mustapha Bagudo1*, Nasiru Yunusa2, Aisha Oyiza Otori2
1 Department of Accounting, Ahmadu Bello University, Zaria Kaduna State, Nigeria
2 Department of Accounting Ahmadu Bello University Zaria
* Corresponding author: mmbagodu@yahoo.com
Published: Jun, 2014
Pages: 70-85
Views: 61
Downloads: 39

Abstract

Prior to mandatory adoption of International Financial Reporting
Standards (IFRS), the Nigerian Statement of Accounting Standard (SAS)
was considered of low quality and inadequate to address the financial
reporting needs of companies in Nigeria. Nigeria adopted IFRS to
overcome the weaknesses of SAS and improve the information contents
of financial reports in Nigeria. This study compares the information
contents of Book Value per Share (BVPS) and Earnings per Share (EPS)
under SAS and IFRS to determine the impact of IFRS adoption on the
value relevance of accounting information in the Nigerian financial
industry using Ohlson (1995) model. Data is collected from 52
companies for the period 2010-2013. The overall result shows that the
adoption of IFRS has improve the value relevance of accounting of
accounting information in the Nigerian financial industry. The
coefficients of BVPS and the EPS and the combined value relevance of
accounting information measured by adjusted R-square are higher
under IFRS than under the Nigerian SAS. The study recommends future
research in the non-financial firms and other proxies of accounting
quality such as earnings management for better understanding of the
impact of IFRS in Nigeria. Future research should also examine the
long-term effect of IFRS adoption in Nigeria.

Keywords

IFRS SAS value relevance of Accounting Information

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How to Cite

Bagudo, M. M., Yunusa, N., & Otori, A. O. (2014). MANDATORY ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS AND VALUE RELEVANCE OF ACCOUNTING INFORMATION IN THE NIGERIAN FINANCIAL FIRMS. Nigerian Journal of Accounting Research, 10(1), 70-85.

M. M. Bagudo, N. Yunusa, and A. O. Otori, "MANDATORY ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS AND VALUE RELEVANCE OF ACCOUNTING INFORMATION IN THE NIGERIAN FINANCIAL FIRMS," Nigerian Journal of Accounting Research, vol. 10, no. 1, pp. 70-85, June 2014.

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