Adoption of IFRS in Nigeria

IFRS in Nigeria
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IFRS in Nigeria
By 28th July 2010, Nigeria was among the other 90 nations across the world that had adopted IFRS. Nigerian Federal Executive Council (NFEC) together with the Nigerian Accounting Standard Board (NASB) were among the leading bodies that oversaw the introduction and implementation of IFRS as a sole set of global accounting standards in the country. IFRS is required as a framework that provides a guideline in the reporting of financial statements. Since its adoption, IIFRS has not only boosted the quality of financial reporting but also helped to enhance uniformity, comparability, and reliability of reports in Nigeria.
The decision of NFEC and NASB to introduce IFRS relied on the recommendations given out a the report compiled by a committee set to discuss the criteria to be used in adapting of IFRS. The adoption of IFRS in Nigeria was phased into three stages. The first phase was approved and adopted in 2012 for quoted companies as well as firms that operate publicly (Iyoha & Faboyede, 2011). The second phase was adopted in 2013 for other entities that have public interests. The last phase was adopted in 2014 for small and medium enterprises. All listed corporations in Nigeria are mandated by NASB as well as IASB to adopt IFRS after the roadmap for adoption was put up (Iyoha & Faboyede, 2011). Today, financial reporting has incorporated the complete set of associations between the management, stakeholders and shareholders and the board of companies as well as institutions to improve quality after the introduction of IFRS.
Prior to the adoption of IFRS in Nigeria, preparation and reporting of financial statements were guided by a regulatory framework that had been prescribed by Allied Matter Act. One of the requirements was to have the financial statements of all companies and institutions in harmony with Statement of Accounting Standards (SAS). Another requirement was to ensure all corporations in Nigeria are audited per the General Auditing Standards (Okoye, Okoye, & Ezejiofor, 2014). Therefore, IFRS only came in as an advancement of a regulatory structure that had been existing already. In other words, the already underlying framework provided a foundation for the easy implementation of IFRS in Nigeria.
Even though there was a regulatory framework before the introduction of IFRS, still there were problems and gaps to be filled in reporting and preparations of financial statements, and this necessitated the adoption of IFRS. One of the reasons was the difficulty faced when comparing the financial statements of local and international companies. The second difficulty revolved around group companies that had to consolidate their financial statements (Adeyemo & Isenmila, 2013). The third challenge was the lack of competitiveness and attractiveness of the capital market because of the inadequate local financial reporting standards that result in a lacked of quality in financial information (Okoye, Okoye, & Ezejiofor, 2014). Last...