International Financial Reporting Standards Adoption and Financial Reporting Information Overload: Evidence from Nigerian Banks
GSTF Journal on Business Review
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Title |
International Financial Reporting Standards Adoption and Financial Reporting Information Overload: Evidence from Nigerian Banks
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Creator |
Koholga, Ormin
Jerry, Musa |
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Subject |
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International financial Reporting Standard, Financial Reporting, Information Overload, Nigerian GAAP, Investors. — |
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Description |
The wide adoption and implementation ofInternational Financial Reporting Standard (IFRS)principally hinges on the notion that it promotes theproduction of high quality financial information forinvestor’s decision making in the current globalizedworld. However, IFRS adoption is stated to beassociated with the problem of information overload.This paper examines this assertion within theNigerian banking industry. Data is generated fromthe financial reports of thirteen banks quoted on theNigerian Stock Exchange as at 31st December, 2014,two years pre and post-IFRS adoption. Descriptivestatistics is utilized to analyse the data and the pairedsampled t-test statistics to test the hypotheses. Thedescriptive results reveal that on average, IFRSadoption cause a 31.6% increase in the length offinancial reports with the accounting policies segmentincreasing by 95.3%, income statement by 84.6%,notes to the accounts by 70.2%, managementdiscussion and analysis by 23.2%, cash flow statementby 13.3%, and statement of financial position by9.7%. Only the others segments of the financialreports decrease by 10%. The results of the paired ttestshows that there is a significant difference in theoverall length of information disclosed by Nigerianbanks in the pre and post-IFRS adoption periodsimplying IFRS adoption led to information over loadin the financial reports of Nigerian banks. Furtherinvestigation reveals that notwithstanding theincrease in information disclosure, post-IFRSreporting is more decision relevant. The paperrecommends that investors seeking investmentopportunities in the post-IFRS regime shouldpatronize financial analyst to guide their decisionmaking and the regulatory authorities especially theCentral Bank of Nigeria should discourage companydirectors from disclosing unnecessary information byregulating on the maximum number of pages inannual reports and accounts.
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Publisher |
GSTF Journal on Business Review (GBR)
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Contributor |
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Date |
2016-10-31
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Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article — |
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Format |
application/pdf
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Identifier |
http://dl6.globalstf.org/index.php/gbr/article/view/1754
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Source |
GSTF Journal on Business Review (GBR); Vol 4, No 4 (2016): Journal on Business Review (GBR) Vol.4 No.4
ISSN: 2251-2888 2010-4804 |
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Language |
eng
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Relation |
http://dl6.globalstf.org/index.php/gbr/article/view/1754/1788
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Coverage |
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Rights |
Copyright (c) 2017 GSTF Journal on Business Review (GBR)
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