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Challenges in Adoption of Ifrs in Nigeria

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Challenges in Adoption of Ifrs in Nigeria
JORIND (9)1 June, 2011. ISSN 1596-8303. www.transcampus.org/journals. www.ajol.info/journals/jorind

THE CHALLENGES OF ADOPTING INTERNATIONAL FINANCIAL REPORTING SYSTEM IN NIGERIA Anthony O. Garuba Department of Accounting and Finance, Western Delta University, Oghara, and Pat Donwa Department of Accounting, University of Benin, Benin City E-mail: anthonygaruba@yahoo.com Abstract Nigeria is going to adopt International Financial Reporting Standard (IFRS) from 1st January 2012. Globalization and Information and Communication Technology (ICT) has reduced the world to a global village. This has given rise to the continuous integration of the world economy and capital markets which has in turn given rise to increase in the interdependence of international financial markets. As a result of this, there is increased mobility of capital across boundaries of the globe. Therefore, in order to ensure and sustain investors’ confidence in the capital market, the issue of corporate governance has now been brought to the front burner because that is the only way corporate financial reporting can be seen to be transparent. However, to operate in the global financial markets there is the urgent need for a uniform global financial reporting, hence most countries have embraced IFRS either by adoption, adaptation or convergence. It is therefore, the intention of this paper to critically examine the adoption of IFRS, its challenges and to proffer solutions that would ensure seamless transition in Nigeria. Keywords: Investors, international standards, globalization and financial statements.

Introduction The move towards developing an acceptable global high-quality financial reporting standards started in 1973 when the International Accounting Standards Committee (IASC) was formed by 16 professional accounting bodies from Canada, United States of America, United Kingdom, Germany, France, Netherlands, Australia, Mexico and Japan. The IASC was reorganized into the International Accounting


References: Adam, M. (2009). Nigerian Banks: The Challenges of Adopting International Financial Reporting Standards, Zenith Economic Quarterly Vol.4 No2( April, Pp 17-26). Azobi, C. (2010). Preparation of Financial Statements: Challenges of Adopting IFRS and IPSAS. Being paper presented at ICAN Interactive Session for Accountants in Education(Lagos, March 8) International Federation of Accountants (2004). Challenges and success in implementing International Financial Standards: Achieving Convergence to IFRSs and ISAs. New York. Izedonmi, F. (2010). Preparation of Financial Statements: challenges of Adopting IFRS and IPSAS. Being paper presented at ICAN Interactive Session for Accountants in Education(Lagos, March 8) Mongiello, M. (2009). international Financial Reporting. Download Free Textbooks at BOOKBOON.Com. Standard and Poor (2007). IFRS Beyond Transition. CreditWeek, Vol.27, No.5, 31st January. Umoru, H. and Ismail, S. (2010). Nigeria To Adopt International Financial Reporting in January 2012. Vanguard. 6th September, p26. United Nations Conference on Trade and Development. (2008). Practical Implementation of International Financial Reporting Standards: Lessons Learned. New York. Walther, L.M. and Skousen, C.J. (2009). Using Accounting Information . 319
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