IFRS adoption and earnings predictability: evidence from listed banks in Nigeria

  • Released On
    Friday, 05 May 2017
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/bbs.12(1-1).2017.10
  • Article Info
    Volume 12 2017, Issue #1 (cont.), pp. 166-174
  • TO CITE АНОТАЦІЯ
  • Cited by
    5 articles
  • 873 Views
  • 770 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

The quality of financial report and the extent to which investors rely on them to forecast future earnings is dependent on the accounting standards employed. The impact of IFRS adoption on earnings predictability of listed banks in Nigeria was examined in this study considering a sample of 11 listed banks in Nigeria. Categorically, data were obtained from the financial statement 2013 to 2014 (post-adoption period) and 2010 to 2011 (pre-adoption period). The data obtained were analyzed using regression on the Statistical Package for Social Sciences (SPSS). The study found a decrease in the ability of current earnings to predict future earnings after the adoption period. Thus, IFRS adoption has a negative impact on earnings predictability. The study further suggested that regulatory bodies of the banking sector should enforce strict adherence to IFRS procedures and principles, as well as put in place measures that will improve investors’ protection.

view full abstract hide full abstract
    • Table 1. Descriptive statistics of test, earnings predictability proxies and control variables used in the analysis
    • Table 2. Test of correlation matrix of the sampled variables
    • Table 3. Earnings and cash flow predictability