Prospects and challenges of international financial reporting standards adoption in selected audit firms in Southwest Nigeria

Abstract

This study examined the prospects and challenges of International Financial Reporting Standards (IFRS) adoption in selected Firms in Southwest Nigeria. Data were obtained from primary and secondary sources in the context of prospects and challenges of International Financial Reporting Standards (IFRS) adoption. A structured questionnaire was used to gather data from 109 auditors and accountants in auditing firms in four (4) foremost professional accounting firms having good track records and reputation in Southwest Nigeria. The questionnaires were analyzed using frequency distribution table, and Chi-square (χ2) distribution using Statistical Package for Social Sciences (SPSS). The cross-sectional survey design was adopted for the study. The results show that IFRS adoption in Nigeria, has the potential to provide greater benefits than the current GAAP, that there will be greater compliance with accounting standards under IFRS than in GAAP, that IFRS adoption will not pose significant challenges to financial reporting and IFRS adoption will bring about a better comparison of financial statements worldwide. Recommendations were made to forestall such challenges which include strengthening education and training, government provision of funds to educate all stakeholders, establishment of accounting curricula in all training firms and institutions should be updated and effective, professional accounting bodies in Nigeria should make IFRS training a part of the Mandatory Continuing Professional Education (MCPE) at a reduced cost, and there should be establishment of an independent body to monitor and enforce accounting and auditing standards.