Nigeria has adopted international financial reporting standard (IFRS) from 1st January, 2012. The study examined the extent to which adoption of international financial reporting standards (IFRS) can enhance financial reporting system in Nigerian Universities. The population of the study comprised 160 senior accountants and internal auditors. A survey design was adopted for the study. The mean scores and Z-Test was used in analyzing the data generated for the study. The findings indicated that there are a lot of accounting areas the accountants and auditors should focus in discharging their duties. And as well a lot of implications are also involved. Mostly accountants, auditors, bursars, financial analyst, etc, are the personnel involve in the IFRS financial instruments. It was recommended among others that the curricula of our institutions should be reviewed to incorporate IFRS, so that accountants and auditors will be acquainted with IFRS guidelines and standards.
Keywords: Accountants, auditors’ international standards, financial statements and institutions.
The introduction of an acceptable global high – quality financial reporting standards was initiated in 1973 when the international accounting standard committee (IASC) was formed by 16 professional bodies from different countries (such as United States of America, United Kingdom, France, Canada, Germany, Australia, Japan, Netherlands and Mexico) all over the world (Garuba and Donwa, 2011). This body was properly recognized in 2001 into the International Accounting Standards Board (IASB), and as well has developed accounting standards and related interpretations jointly referred to as the International Financial Reporting Standards (IFRS).
The dominance of IFRS further improved in September 2002, when the United States Financial Accounting Standard Board (FASB) and IASC under took to work closely based on their agreement to develop high quality compatible accounting standards that could be adopted for both domestic and cross border financial reporting. These bodies so far achieved their objectives and are far advanced in the IFRS – US Generally Accepted Accounting Principles (GAAP), convergence. Although, many developing countries who do not want to be left behind took a cue from the world major economics to either adapt, adopt or converge the IFRS. Different countries on the other hand use different approaches in adopting IFRS based on their need and ability to adopt (Azobi, 2010).
As part of plans to meet international standards, the Federal Government has disclosed that new accounting system, the international financial reporting standard (IFRS) will (Umoru and Ismail, 2010) take off in Nigeria on 1st January, 2012. In Nigeria, the government has taken its stand to involve all stake holders including institutions before it finally decided to adopt the IFRS on a gradual basis. According to Ezeokoli (2001) as cited by Ejike (2012), financial reporting has involved the full set of relationship between the company’s board, its management, its shareholders, and other stakeholders, including institutions (Universities) and the community in which it is located.
The board of directors is supposed to be accountable to shareholders in any company for effective monitoring; hence there must be an independent relationship between the board and management. This has resulted to various rules, principles and regulations which have been issued in various countries in the area of audit, accounting, and internal control and audit committees to checkmate the operations of corporate body and corporate fraud (different sectors).
The objectives and importance of introducing IFRS according to Fowokan (2011) are:
To work actively with the national setter to bring about convergence of national accounting standards.
IFRSs are designed for adoption by profit oriented entities.
IFRSs require that financial statements (FS) give a true and fair view of the financial health of entities.
To develop a single set of high quality understandable and enforceable global accounting standard that requires transparentand comparable information in financial statements.
To help participants in various capital markets (investors, stock brokers,etc) across the globe to understand financial statements.
However, the theoretical foundations underpinning Nigerian GAPP and IFRS are not altogether similar, though, there will be increased responsibilities in setting accounting policies that fit business models, on the part of the professional accountants and auditor who must also be ready to explain and justify these policies in the context of the IFRS framework.
In order to achieve the above objectives, practical implementation of IFRS requires adequate technical capacity among preparers and users of financial statements, (auditors, accountants and regulator authorities). The fact remain to impact knowledge, one must be knowledgeable. Garuba and Donwa (2011) supporting the above view, affirmed that there is need to train the educators so as to be abreast with the IFRS. Hence, when they are well trained and equipped they will be able to impact knowledge to others. Therefore, the government, institutions, professional and corporate bodies have a great role to play in this regard especially in subsidizing the training costs of the educators.
Most of the professional bodies require tertiary education certificate as a pre-requisite for enrolling for their professional examinations (NASB, 2010). The input and output of the tertiary education system have a huge impact on the success of IFRS implementations in Nigerian institutions.
A study conducted by the NASB in 2008 on “Gap Analysis” of accounting curriculum content and statement of accounting standards in Nigerian Universities showed the low level of coverage of the local standard in tertiary institutions. This underscored the need for a concerted and coordinated effort that will assist in the introduction and sustenance of the teaching and learning of IFRS in Nigerian tertiary institutions. In this regard, Ejike (2012) buttressed the above view by attesting that the Institute of Chartered Accountants of Nigeria (ICAN) braised the trail when it organized a one-day “interactive forum for Accountants in Education” free of charge in Lagos on the 8th of March, 2012.
The accountants, auditors, etc, whether in companies or institutions are expected to abide by these rules and regulations but most of then are deviants to these rules. Hence, some of these accountants and the managements (managers) are deviants in reporting the financial statements based on true and fair views.
It is glaring that to operate in the modern day world economy and to realize the full gains of international listing; no individual country can act in isolation in its financial reporting standards.
1.2STATEMENT OF THE PROBLEM
The management of institutions seeks to establish rules and laws to guide how they relate to each other to at least reduce conflicts. This is the essence of regulations and management. Management is not effective if it is not supported by good and globally financial reporting standards.
Orjioke (2002) viewed that public companies, institutions etc, can achieve rapid growth and development if they are made to follow the regulation guiding financial reporting.To Emenike (1997) in Ejike (2002) research into the regulation of financial regulation (FR) in public related offices/companies has been scanty over the last decades. The problem of this study therefore, is to find out whether the accountants, auditors and managements ensure the integrity and credibility of globally financial reporting system which is the key to our economic transformation and growth.
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