Impact of International Financial Reporting Standard on Earning Management of Listed Firms in Nigeria

ABSTRACT

This study examines the impact of International Financial Reporting Standards (IFRS) on Earnings Management (EM) in the listed firms in Nigeria using dangote cement as case study. The alterations by the management with the performance of companies for either private gains or to deceive shareholders have been a thing of concern for various stakeholders. IFRS is considered to be a high quality standard that can bring uniformity in the way financial statements of companies are prepared. Secondary data were collected from the annual reports of the study sampled firm in the sector for a period of three (2018-2020) years. The data were analyzed using descriptive statistics and multiple regressions. The descriptive statistics shows that there is reduction in the mean value of variables in post-adoption periods. On the other hand, the regression analysis shows that IFRS has negative and insignificant effect on the level of EM. The result implies that IFRS adoption is a policy for uniformity of accounting standards across the globe, which does not have significant change in the attitudes of management of companies towards EM. The study recommends that in order to reduce the level of EM significantly, other factors such as socio-economic and political should be considered by adopting measures that can reduce their influence.
Key Words: International Financial Reporting Standards (IFRS), Earnings Management (EM), Discretionary Accruals.