EFFECTS OF MANDATORY ADOPTION OF IFRS ON EARNINGS MANAGEMENT IN QUOTED MANUFACTURING COMPANIES IN NIGERIA

SOEPDING BENARD ALKALI

Abstract


This research examines the effect of the mandatory adoption of International Financial Reporting Standards (IFRS) on earnings management in the manufacturing sector of Nigeria. 21 manufacturing
companies that fully adopted IFRS within the period under review were
used for the study. Pearson Product Moment Correlation (PPMC) was used
to analyze the data, besides analysis of Variances (ANOVA), regression
analysis and t-test which were carried out using SPSS version 22. The
findings of the research show that there was significant earnings management in the Nigerian manufacturing sector before the mandatory
adoption of IFRS but earnings management reduced after the mandatory
adoption. Hence, the reduction in earnings management is not significant
and therefore, the difference in earnings management before and after the
IFRS adoption in quoted manufacturing companies in Nigeria is not
statistically significant. It is recommended that increased supervision of
financial reporting of quoted manufacturing companies in Nigeria by the
Financial Reporting Council of Nigeria and Auditors' report should
include earnings management discovered in the course of audit and not just being expressed in the management letter.

Keywords


Mandatory adoption, IFRS, Earnings Management, Creative Accounting.

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International Journal of Management Science Research ISSN ISSN 2536 – 605X(Print)

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