Thesis Abstract

The main objective of the study involved the assessment of the impact of the adoption of International Financial Reporting Standards on the performance reporting of Nigerian Deposit Money Banks using financial ratios, while the specific objectives involved the examination of the effects of the adoption of IFRS on the reported profitability measured by return on equity (ROE), on the reported liquidity, measured by current ratio (CR), on the reported gearing ratio measured by Total Deposit to Equity (TDE), and on the reported interest cover measured by (FCC) of the Nigerian Deposit Money Banks. The globalization of business had necessitated the introduction of International Financial Reporting Standards (IFRS) in order to present a globally accepted and high quality financial statements which will provide reasonably accurate information about a company’s financial performance to investors and other interested parties. However, accounting under IFRS and pre-changeover Nigerian accounting standards hampers the consistency of information in the financial statements due to the application of fair value accounting and thus affects the performance of Nigerian Banks. This study examined the effects of IFRS adoption on the reporting performance of Nigerian listed banks using four (4) key financial ratios (ROE, CR, TDE and FCC). The study covered a period of four (4) years pre-adoption of IFRS and four (4) years post –adoption of IFRS.

The study employed an ex-post facto research design. The population of the study constitutes all the 15 Deposit Money Banks Listed on Nigerian Stock Exchange (NSE) as at 31st December, 2015, while eight (8) banks were selected using a purposive sampling technique. Pearson’s Correlation Analysis, Analysis of Variance (ANOVA) and Regression Analysis were used to find the effects of IFRS adoption on financial ratios while paired sample t –test and F-test were used to test the significance of the difference in means and variances between ratios under IFRS and Nigerian Generally Accepted Accounting Principles (NGAAP) respectively.

The result of the findings revealed that there is statistical significant difference in ROE, CR, TDE and FCC prior and after the IFRS adoption. Transition in standards has therefore drastically enhanced the reported accounting figures and estimates of Deposit Money Banks listed on the Nigerian Stock Exchange (NSE). Also, IFRS positively influenced the banks’ ROE and TDE, but has significant negative effect on CR and FCC. The study concluded that IFRS adoption has a significant effect on the financial ratios of Nigerian banks and consequently on their reporting performance.

Keywords IFRS, IAS,Financial Ratios, Nigerian GAAP, Financial Performance, IASC/IASB

Thesis Overview