EFFECT OF INTERNATIONAL FINANCIAL REPORTING STANDARD ON CORPORATE PERFORMANCE OF SELECTED BANKS LISTED ON NIGERIA STOCK EXCHANGE
EFFECT OF INTERNATIONAL FINANCIAL REPORTING STANDARD ON CORPORATE PERFORMANCE OF SELECTED BANKS LISTED ON NIGERIA STOCK EXCHANGE

Summary/Abstract: In the light of globalisation, where foreign investments have becometrendy, comparability of financial reports of Nigerian firms and those of otherfirms across the world has become a concern. Nigerian firms have beenmandated to adopt the International Financial Reporting Standards (IFRS) intheir financial reporting. This study has examined the effect of the IFRSadoption on the reported performance of Nigerian banks listed on the NigerianStock Exchange. Eight (8) out of the fourteen (14) quoted banks were selectedfor the study. The four indices of performance employed in the study areprofitability using the return on equity, liquidity using total deposit to totalloan, loan grants and then market value measured by price earnings ratio forthe period (2011 and 2012). 2011 represented GAAP era while 2012 stands forIFRS adoption. A comparability index for the banks was computed using theExcel Spreadsheet for each of the banks on each variable. Then the OneSample Test was employed for the analyses. The mean was used to answer theresearch question while the t-statistics tested the hypotheses. The resultsshowed that mean values for profitability, liquidity and market value aregreater in the GAAP era (2011) than in the IFRS period (2012), while loangrant was higher for the IFRS period (2012). The t-tested indicated the factthat none of the variables had significant effect. Thus, the study concluded thatIFRS adopted does not have significant effect on bank performance reported in2011 and 2012. The use of IFRS for all firms, as well as incorporation of IFRSguideline in professional training are recommended by this study.

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