IDEAS home Printed from https://ideas.repec.org/a/scm/ejafbu/v13y2020i23p80-87.html
   My bibliography  Save this article

Effects Of Ifrs Adoption On Earning Variability Of Selected Deposit Money Banks In Nigeria: A Co-Integration Analysis Approach

Author

Listed:
  • Ifeoma Patricia OSAMOR

    (Lagos State University, Lagos, Nigeria)

  • Matthew Adeolu ABATA

    (Lagos State University, Lagos, Nigeria)

  • Chinyere Clareth ELLUH

    (Lagos State University, Lagos, Nigeria)

Abstract

The quality of financial reports made available to users of financial statements affects their behavior towards investment and economic activities, thereby affects the economy of the nation. The study therefore examined IFRS adoption and earnings variability of listed deposit money banks in Nigeria. The study adopted ex-post factor research design using secondary data which were sourced from the annual reports of ten banks from 2006 to 2018. Data spanned Seven (7) years before IFRS adoption (2006 – 2012) and seven years after IFRS adoption (2012 – 2018). Descriptive statistics, unit root test, co-integration test and regression were employed to analyze the data. The Fully Modified OLS (FMOLS) results showed R2 of 0.672652, while Dynamic OLS (DOLS) estimates R2 of 0.740295 which implied that 67% and 74% variations in Earnings were explained by the variation in Size, Profit, IFRS and the interacting variable respectively. FMOLS and DOLS estimations revealed that IFRS post-adoption has significant effect on earning variability. The study concludes that IFRS adoption significantly impacted on the quality of financial report. Therefore, the study recommended that banking firms should explore the benefits and provisions of IFRS to improve on their financial reporting practices.

Suggested Citation

  • Ifeoma Patricia OSAMOR & Matthew Adeolu ABATA & Chinyere Clareth ELLUH, 2020. "Effects Of Ifrs Adoption On Earning Variability Of Selected Deposit Money Banks In Nigeria: A Co-Integration Analysis Approach," European Journal of Accounting, Finance & Business, "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration, vol. 13(23), pages 80-87, June.
    • Handle: RePEc:scm:ejafbu:v:13:y:2020:i:23:p:80-87
    as

    Download full text from publisher

    File URL: http://www.accounting-management.ro/getpdf.php?paperid=23_10
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Roberto Carlos Klann & Ilse Maria Beuren, 2015. "The Impact of the International Accounting Convergence on Income Smoothing in Brazillian Companies," Brazilian Business Review, Fucape Business School, vol. 12(2), pages 1-24, March.
    2. Holger Daske & Luzi Hail & Christian Leuz & Rodrigo Verdi, 2008. "Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences," Journal of Accounting Research, Wiley Blackwell, vol. 46(5), pages 1085-1142, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leye Li & Louise Yi Lu & Dongyue Wang, 2022. "External labour market competitions and stock price crash risk: evidence from exposures to competitor CEOs’ award‐winning events," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1421-1460, April.
    2. Stolowy, Hervé & Jeanjean, Thomas & Erkens, Michael, 2011. "The economic consequences of increasing the international visibility of financial reports," HEC Research Papers Series 957, HEC Paris.
    3. Lucian MUNTEANU, 2011. "Cost Of Equity, Financial Information Disclosure, And Ifrs Adoption: A Literature Review," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 24(4), pages 67-80, december.
    4. Suman Banerjee & Saul Estrin & Sarmistha Pal, 2022. "Corporate disclosure, compliance and consequences: evidence from Russia," The European Journal of Finance, Taylor & Francis Journals, vol. 28(17), pages 1770-1802, November.
    5. Paugam, Luc, 2011. "Valorisation et reporting du goodwill : enjeux théoriques et empiriques," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/8007 edited by Casta, Jean-François.
    6. Diantimala, Yossi & Wijayana, Singgih, 2024. "Compliance and familiarity with fixed assets' disclosure requirements and firm value," Emerging Markets Review, Elsevier, vol. 62(C).
    7. Xiao Li & Jeffrey Ng & Walid Saffar, 2021. "Financial Reporting and Trade Credit: Evidence from Mandatory IFRS Adoption," Contemporary Accounting Research, John Wiley & Sons, vol. 38(1), pages 96-128, March.
    8. Akisik, Orhan & Gal, Graham, 2023. "IFRS, financial development and income inequality: An empirical study using mediation analysis," Economic Systems, Elsevier, vol. 47(2).
    9. Liu, Baohua & Huang, Dan & Chen, Tao & Chan, Kam C., 2023. "Mandatory R&D disclosure and analyst forecast Accuracy: Evidence from an emerging market," Journal of Contemporary Accounting and Economics, Elsevier, vol. 19(3).
    10. Hyunmi Ji, 2019. "The Impact of Interest Coverage Ratio on Value Relevance of Reported Earnings: Evidence from South Korea," Sustainability, MDPI, vol. 11(24), pages 1-11, December.
    11. Terry Shevlin, 2013. "Some personal observations on the debate on the link between financial reporting quality and the cost of equity capital," Australian Journal of Management, Australian School of Business, vol. 38(3), pages 447-473, December.
    12. Jiao, Tao & Koning, Miriam & Mertens, Gerard & Roosenboom, Peter, 2012. "Mandatory IFRS adoption and its impact on analysts' forecasts," International Review of Financial Analysis, Elsevier, vol. 21(C), pages 56-63.
    13. Lang, Mark & Maffett, Mark, 2011. "Transparency and liquidity uncertainty in crisis periods," Journal of Accounting and Economics, Elsevier, vol. 52(2), pages 101-125.
    14. Donal Byard & Ying Li & Yong Yu, 2011. "The Effect of Mandatory IFRS Adoption on Financial Analysts’ Information Environment," Journal of Accounting Research, Wiley Blackwell, vol. 49(1), pages 69-96, March.
    15. Renhui Fu & Fang Gao & Yi Zhao, 2024. "The capital market consequences of stock market liberalisation: Evidence from Mainland‐Hong Kong Stock Connect Programs in China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(4), pages 3275-3299, December.
    16. Keryn Chalmers & Greg Clinch & Jayne M Godfrey, 2011. "Changes in value relevance of accounting information upon IFRS adoption: Evidence from Australia," Australian Journal of Management, Australian School of Business, vol. 36(2), pages 151-173, August.
    17. Iain Clacher & Alan Duboisée Ricquebourg & Allan Hodgson, 2013. "The Value Relevance of Direct Cash Flows under International Financial Reporting Standards," Abacus, Accounting Foundation, University of Sydney, vol. 49(3), pages 367-395, September.
    18. Alex Frino & Riccardo Palumbo & Francesco Capalbo & Dionigi Gerace & Vito Mollica, 2013. "Information Disclosure and Stock Liquidity: Evidence from Borsa Italiana," Abacus, Accounting Foundation, University of Sydney, vol. 49(4), pages 423-440, December.
    19. Anna Bergman Brown, 2016. "Institutional Differences and International Private Debt Markets: A Test Using Mandatory IFRS Adoption," Journal of Accounting Research, Wiley Blackwell, vol. 54(3), pages 679-723, June.
    20. Glavan Roxana Florina, 2019. "Consequences And Motivations Of Adopting Ifrs: Perceptions Regarding Institutional Factors," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 5, pages 155-161, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:scm:ejafbu:v:13:y:2020:i:23:p:80-87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Liviu Scutariu The email address of this maintainer does not seem to be valid anymore. Please ask Liviu Scutariu to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/feusvro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.