European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals


Determinant of Audit Quality in Post IFRS and 2018 Code of Corporate Governance: Evidence from Nigeria (Published)

Audit quality is an issue of great concern in dealing with the confidence and credibility crisis that has engulfed the investment scene following collapse of many firms around the world as a result of outright fraud or fraudulent financial reporting. The study used panel data approach to investigate determinant of audit quality of firms listed in Nigerian Stock Exchange. Positivist research paradigm and Ex post facto research design was adopted. Thus secondary data was collected from sample of 14 firms purposively selected from non-financial firms from 2012 to 2019 resulting to 112 firm specific observations. Audit quality measured by accrual quality developed by Dechow and Dichev 2002 is the dependent variable.  Audit fee, audit independence, audit switching, audit effectiveness (audit firm size) constitute the independent variables. Result of the study revealed that about eleven percent variation in the audit quality of sampled firms was jointly explained by the independent variables used in the study. The beta coefficient of the variables showed that audit fee, audit independence, audit switching and audit effectiveness (audit firm size) is negative but not significant in influencing accrual level. This indicates that the independent variables by reducing accrual level increases audit quality. The study concluded that audit fee, audit independence, audit switching and audit effectiveness by reducing accrual level has positive but insignificant effect on audit quality of selected firms. The study affirms Agency theory that managers opportunistic behaviour can be reduced by a third party employed by the owners. The study among other things recommended that firms should review their policies particularly as it concerns their external auditors to ensure that there are no familiarity threats, real or perceived conflict of interest that will undermine their independence in carry out their services. there is also need to enforce recent regulations toward audit firm rotation or switching after the ten years’ period specified in the 2018 Code of corporate governance in order to reduce information risk and enhance audit quality.

Keywords: Audit fee, Capital market, Determinant, IFRS, Independence, audit effectiveness, audit switching

Mandatory Environmental Disclosures by Companies Complying With IAS/IFRS: A Case of Nigeria (Published)

The Report of the Vision 2020 Committee set up to provide a roadmap that will propel Nigeria among the top 20 world economies by 2020 acknowledged that the country is faced with many environmental problems such as the continuous exploitation of marginal lands, drought and desertification in the north, severe gully erosion in eastern and northern states, uncontrolled logging with inherent problems of the destruction of bio-diversity, inappropriate agricultural practices, destruction of watershed, destruction of vast agricultural lands, creation of burrow pits due to bad mining practices and road works, oil pollution from spillage and gas flaring, urban decay and squatter settlements, industrial pollution and municipal waste generation among other things. In view of the above, this paper examines mandatory disclosure of environmental accounting by companies complying with IFRS/IAS in Nigeria. Contents analysis research design was adopted by reviewing the available literature in the field of this study. It was discovered that Nigeria was facing with challenges of inaccurate data, incompetent manpower, and lack of transparency among companies. Despite these shortcomings Mandatory reporting present several advantages such as the creation of standardized and comparable measures that enable benchmarking and best practices among companies complying with IFRS/IAS in Nigeria. It was concluded that aside from complying with IFRS/IAS, Incentives and enforcement was also identified as a factor for full convergence and comparability among companies.

Keywords: Companies, IAS, IFRS, Nigeria, environmental disclosures

Review on International Financial Reporting Standards (IFRS) for Small and Medium Entities in Nigeria (Published)

The Nigerian Accounting Standard Board (NASB) provides guidelines on the implementation of national policy on preparation and presentation, recognition and measurement, and disclosure of corporate reporting on financial statement of an entities in Nigeria. International Accounting Standard Board (IASB) provides the framework for IFRS and IAS application on corporate financial reporting. The emerging of IFRS convergences by NASB on SMEs in Nigeria attract urgent attention. This study aims to measure the level of awareness of IFRS guidelines for SMEs operators in Nigeria and preview on the challenges facing the adoption and implementation of the IFRS for small and medium scale entities in Nigeria. This study adopted review approach to address the procedure of adoption of IFRS by SMEs in Nigeria. The study concluded that the awareness, policy and regulation on IFRS for SMEs in Nigeria were very low and the policies for the implementation process were not completely complied

Keywords: IAS and Globalization, IFRS, SMEs

Mind the GAAP: Cultural, Political, and Legislative Roadblocks To IFRS Integration in the U.S. (Published)

In October, 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) signed the ground-breaking Norwalk Agreement. This agreement signified the two parties’ commitment to the ultimate convergence of United States Generally Accepted Accounting Principles and International Financial Reporting Standards. What appeared at its genesis as a good faith effort to speed convergence between the two respective frameworks seems to have misfired, with an emphasis which now appears to be moving away from convergence, and focused instead on the duality and plurality of co-existing frameworks. The SEC, a governmental entity who had previously issued a clarion call for convergence and had gone so far as to eliminate the required IFRS – GAAP reconciliations for overseas issuers in 2007, appeared in 2011 to do something of a U-turn, and even appeared to retreat from their initial convergence position by suggesting that a US issuer who is in compliance with US GAAP be allowed to state that their financial statements are also in compliance with IFRS. This paper examines the changing attitudes and increasing aversion toward IFRS integration in the US, and attempts to understand some of the reasons; specifically cultural, political, and legislative, which may help to explain this changing of attitudes and direction.  There appears to be a litany of prior research relating to US GAAP and IFRS integration, but the research does not tend to focus on specific reasons why convergence has not occurred, and why attitudes toward it have changed. This paper attempts to fill a perceived gap in the research related to the examination of potential political, cultural and legislative drivers of non-convergence. The paper also briefly examines literature related to research conducted which questions whether IFRS has had a positive effect on global capital markets, and whether this positive effect may actually have been caused by the existence of other factors.

Keywords: Convergence, Harmonization, IFRS, Standard-setters, US GAAP

The Extent of Corporate Disclosure of Information by the Companies in CARs and Its Regulations: Implications in Bangladesh (Published)

The relative weight of developing countries regulations in CARs disclosures have been growing hurriedly over recent years. The study is an attempt to examine of disclosure of financial information upon adoption of International Accounting Standards (IASs) in Bangladesh. In international accounting arena disclosure is the key to understanding one country’s accounting system. As they continue integrating into the global trading and financial systems, they need to strengthen their respective national accounting infrastructures, essential to attract and provide services to international investments and institutional and technical capacities to be able to comply with international requirements, standards and codes. The accounting system of each country is affected by different influential factors. Issues concerning developing countries in relation to accounting, and in particular international accounting, have generated considerable interest among accounting scholars and practitioners in both developed and emerging countries. In this paper, the researcher has examined the impact of British colonial influence, regulation, and mandatory IASs/IFRSs on disclosure of Corporate Annual Reports (CARs) of Bangladesh. This study showed that the British colonial influence through the adopted the former British Laws is prevalent on the accounting systems of Bangladesh and has a greater impact on the financial reporting practices of the companies’ financial reporting practices. The Securities and Exchange Ordinance 1969, Bangladesh Bank Order 1972, Securities and Exchange Rules 1987, Bank Companies Act 1991, Financial Institutions Act 1993, Securities and Exchange Commission Act 1993, Companies Act 1994 and Bankruptcy Act 1997 are the most important legislations to govern the corporate financial reporting environment in Bangladesh. Since 1983, Bangladesh is trying to adopt the International Accounting Standards (IASs/IFRS) which has become mandatory from 2000 for the listed companies for preparation and auditing of financial statements. It has found that the Companies Act 1994 does not contain any provision for mandatory observance of the adopted IFRSs and ISAs in practice which has made the unlisted companies to follow IASss/IFRSs compulsorily. In addition, to ensure more transparency in accounting system and disclosure of important accounting policies of banks and financial institutions in Bangladesh, the Central Bank (Bangladesh Bank) issued a circular (BRPD) Circular No. 3/2000 dated 18/04/2000) for mandatory adoption of IAS-30. As a result, since 2000, all banks in Bangladesh are required to use the IAS-30 in the preparation of their corporate annual reports. Further, the Securities Exchange Commission (SEC) of Bangladesh has passed Corporate Governance Guidelines in February 2006 that expect to increase the level of disclosure made the listed companies in Bangladesh.


Keywords: Accounting Standards, Accounting Systems, Colonial Power International Accounting Standards, Disclosure, Financial Reporting, IFRS, Regulation, SEC

International Financial Reporting Standards: Rules Based Approach or Principles Based Approach (Published)

The reason of the study is to evaluate and converse about the good and in depth approach to develop the IFRS. This study covers the importance of the different approaches to develop the IFRS, the effect of rules whether they  have  some  good  effects on  the development of International  Financial  Reporting Standards (IFRS) or have weaknesses  in this regard.  In opposition to the approach of rules these papers covers the explanation about the approach of principles and their complete and in detail effect on the development of IFRS. This research essay covers-a lot of secondary sources which provides many arguments about the IFRSs . In this study we will discuss the importance of some of the necessary factors to develop the IFRS which are very important for almost all the business. The research covers the details in the favor of each approach and also provides the weaknesses of each approach. The different arguments and discussions made by different writers arc-included in this essay that arc written and discusses by them on different occasions. Each writer has his own arguments in the same situation and gives better guidance to make the conclusion about the approach that is better to develop the IFRS.

Keywords: Approaches, IFRS, Reporting

The Impact of IFRS Application on Asymmetry Accounting Information and Quality of Earnings (Published)

This paper tried to study and analyze the impact of international financial reporting standards (IFRS) application on the asymmetry of accounting information and the impact on the quality of accounting profits. The study used the Saudi insurance sector in the application of the study due to its commitment to adapt IFRS since 2009; the study analyzing period was divided into two periods. The first period was before the application of IFRS (2007-2009), while the second period represents what after the application of IFRS (2010-2012) so it consistent with the goal of the study.  The total number of the sample companies has reached (20) companies in each year. The study tested (9) variables in each company for a period of (6) connected years, bringing the total number of views (1080) Shows. Hypotheses testing finding exposed that there is a relationship between the application of IFRS and the asymmetry of accounting information, and there is a significant relationship between the application of IFRS and the quality of earnings after the application of standards and the lack of a relationship before applying the IFRS.

Keywords: Asymmetry Accounting Information, IFRS, Quality of Earnings


This study aims to determine the use of terminology International Financial Reporting Standards (IFRS) in companies that have implemented IFRS on its financial statements. The study used a qualitative approach with a case study. The data collection was done by interviewing staff, managers, and the chairman of the implementation of IFRS or IFRS known as Task Force under the Financial Division of Logistics and Policy at the central office PT Telekomunikasi Indonesia Tbk (Telkom). The results of this study indicate that the use of IFRS terminology in PT Telkom through the phases that have been scheduled by the IFRS Task Force team. IFRS terminology used by PT Telkom is a full adoption of the transaction based. Terminology full adoption of IFRS-based transactions are implemented through four phases. The fourth phase consists of the assessment phase, design, implementation stages of implementation to sustain. Application of transaction-based terminology full adoption of IFRS has been operating effectively. Effectiveness is shown composed of four phases PT Telkom achieved in accordance with the scheduled time

Keywords: Full Adoption Based Transaction., IFRS, IFRS terminology

IFRS-Based Results and the Readiness of Nigerian Audit Committee: The Professional Accounting Academic Standpoint (Published)

This study investigated the level of readiness of the audit committee towards understanding and interpreting IFRS based result in Nigeria. This study adopted the survey research method to garner opinion of stakeholders especially the professional accounting academic. One hundred and twenty copies of questionnaires were administered making forty copies of questionnaire to each of the three university studied. The questionnaires were analyzed with the use of One-Sample t-test. The study found that the presently constituted audit committee in Nigeria is statistically significantly weak in understanding and interpreting IFRS based results. It is therefore recommended as a matter of urgency that the audit committee members be subjected to training that will specifically tailored towards the application of IFRS in their various sectors and industry they represent. This training should not however, be one off. It should be continuous and in timely manner as changes in IFRS is still ongoing

Keywords: Academic, Audit Committee, Financial Report, IFRS, Professional and Nigeria

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