International Financial Reporting Standards’ (IFRS) Adoption and Taxation in South Western Nigeria

Following the adoption and adaption of IFRS, lots of research has been carried out to investigate the influence of IFRS on financial reporting quality. However, very few of these studies have been able to empirically validate the nexus between IFRS adoption and taxation. It is on this basis that this study examined the effect of IFRS adoption on taxation in Southwestern, Nigeria. Agency, descriptive and ability-to-pay tax theories provided the framework, while the survey design of descriptive type was adopted. Judgmental sampling technique was employed with 150 samples drawn from 3 states and local government boards of internal revenue. Self-structured questionnaire (r=.84) was the instrument used. Data collected were analyzed using Pearson’s product moment correlation and multiple regressions at 0.05 level of significance. A significant relationship was found to have existed between IFRS adoption and quality of taxation and reporting (r = .214); calculation and reporting of income taxes (r = .244). Also, IFRS was found to have significantly improve quality of tax computation and reporting (β = 0.034, t= 2.101) and calculation and reporting of income taxes (β = 0.032, t= 3.003).The importance of IFRS adoption and adaptation to taxation cannot be overemphasized. Thus, the implementation of good governance and the independence of the audit committee should be made sacrosanct by the government and management to ensure strict compliance and adherence to IFRS accounting standards.