IMPACT OF IFRS DISCLOSURES ON ORGANIZATIONAL PERFORMANCE
ABSTRACT
The study investigates the effects of IFRS disclosures on organisational performance. It has the following objective: to examine the influence of IFRS disclosures on organisational performance. To assess the level of conformity with the IFRS disclosure principles by companies in Nigeria, and To identify issues around IFRS disclosure in Nigerian organisations. The study's technique involves collecting data from both a primary questionnaire and secondary sources. We randomly distributed the collected questionnaire to Ministry of Finance employees and members of the public. This study used a survey-based research design. The design was appropriate for the study, which sought to investigate the influence of IFRS disclosures on organisational performance by using the Ministry of Housing and Works in Akwa Ibom State as a case study. The study's population comprised eighty-two (82) employees from the Ministry of Works and Housing in Uyo, Akwa Ibom state. The researcher, unable to effectively study the entire staff strength (population) of the organisation, selected a representative number as the sample size. We used sixty-eight (68) employees as our sample size. We analysed the research questions using tables and basic percentages, and tested the research hypotheses using chi-square analysis. All tests were run at the 0.05 level of significance. We decided whether to reject or accept the null hypothesis (H). The investigation revealed the following findings: IFRS disclosures benefit companies. The majority of corporations comply with IFRS disclosure requirements. There is a strong correlation between IFRS disclosure and organisational performance. There are concerns with IFRS disclosure in Nigeria. Nigeria has a high level of IFRS disclosure. This study's findings will inform business managers about the positive and negative effects of IFRS disclosures on organisational performance in Nigeria.
TABLE OF CONTENTS
Title Page - - - - - - - - - i
Approval Page - - - - - - - - ii
Declaration - - - - - - - - iii
Dedication - - - - - - - - - iv
Acknowledgement - - - - - - - v
Abstract - - - - - - - - - vi
Table of Contents - - - - - - - vii
CHAPTER ONE – INTRODUCTION
1.1 Background of the Study - - - - - -
1.2 Statement of General Problem - - - - -
1.3 Objective of the Study - - - - - - -
1.4 Research Questions - - - - - - -
1.5 Hypothesis - - - - - - - - - -
1.6 Significance of the Study - - - - - -
1.7 Scope of the Study - - - - - - -
1.8 Definition of Terms - - - - - - -
CHAPTER TWO – REVIEW OF RELATED LITERATURE
2.1 Introduction - - - - - - - -
2.2 Theoretical framework- - - - - - -
2.2.1 Stakeholder Theory - - - - - - -
2.2.2 Stewardship Theory - - - - - -
2.2.3 Agency Theory - - - - - - -
2.4 IFRS Acceptability - - - - - - -
2.5 IFRS Enforceability - - - - - - -
2.6 IFRS Disclosures - - - - - - -
2.6.4 Ordering the notes about importance- -
2.6.5 Grouping disclosures by nature-- - - -
2.7 Empirical review - - - - - - - -
CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Introduction - - - - - - - -
3.2 Research Design - - - - - - -
3.3 Area of the Study - - - - - - -
3.4 Population of Study - - - - - - -
3.5 Sample size and Sampling Techniques - - - -
3.6 Instrument for Data Collection - - - - -
3.7 Validity of the Instrument - - - - - -
3.8 Reliability of the Instrument - - - - -
3.9 Method of Data Collection - - - - - -
3.10 Method of Data Analysis - - - - - -
CHAPTER FOUR – DATA PRESENTATION AND ANALYSIS
4.0 Introduction - - - - - - - -
4.1 Data Presentation and Analysis - - - - -
4.2 Characteristics of the Respondents - - - -
4.3 Data Analysis - - - - - - - -
4.4 Testing Hypothesis - - - - - - -
4.5 Summary of Findings - - - - - - -
4.6 Discussion of Findings - - - - - -
CHAPTER FIVE – SUMMARY, CONCLUSION AND RECOMMENDATION
5.0 Introduction - - - - - - - -
5.1 Summary - - - - - - - - -
5.2 Conclusion - - - - - - - - -
5.3 Recommendations - - - - - - -
References - - - - - - - - -
Appendix - - - - - - - - -
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
As the business world's financial and trade ties strengthen, many countries are adopting International Financial Reporting Standards (IFRS), which are common accounting rules that specify how transactions should be reported and what information should be disclosed in financial statements. This unified set of standards has solved many problems while introducing new ones. However, the purpose of this study is to examine how IFRS disclosures affect organisational performance. It is critical to consider the big picture and the underlying purpose of IFRS. In an increasingly global marketplace, international comparability is crucial for allocating scarce resources more effectively. To achieve international comparability, significant nations around the world must agree to a single global set of accounting standards. While over 100 countries have previously embraced IFRS, significant countries including the United States, Japan, and India have yet to impose it for publicly traded corporations (Bradshaw et al., 2020). Recall that organisations adhering to the same financial reporting standards enable more accurate comparisons. This distinction is especially significant when comparing organisations from different nations, as their financial statements may be prepared using different standards and techniques. This increased comparability has allowed investors to better evaluate where their investment money should be directed, ultimately improving organisational performance as more investors invest in the company. However, the United States has failed to implement International Financial Reporting Standards, and other nations are also holding out (Bradshaw et al., 2020). This complicates accounting for foreign-based companies doing business in America, as they frequently have to compile financial statements using IFRS and another set using American Generally Accepted Accounting Principles (Bradshaw et al., 2020). IFRS disclosures have a principles-based rather than rules-based perspective. A principles-based philosophy means that each standard's goal is to reach an acceptable valuation in many ways. This approach allows organisations to tailor IFRS disclosures to their own needs, resulting in more easily readable and usable statements. There is a disadvantage to the freedom provided by IFRS disclosure, which allows organisations to use only the methodologies they want and allows financial statements to display only their desired results. Such practices can lead to revenue or profit manipulation, concealing financial difficulties within the organisation, and even encouraging fraud. For example, changing the technique of inventory valuation can increase income in the current year's profit and loss statement, making the company appear more profitable than it actually is. While IFRS requires that changes to the application of the standards be justified, it is frequently possible for businesses to "invent" reasons for making the adjustments. Stricter restrictions would ensure that all organisations value their assertions in the same way.
1.2 STATEMENT OF THE PROBLEM
Several academics researched the impact of IFRS disclosure on organisations, and the results indicated both the benefits and drawbacks of IFRS disclosure. Adopting IFRS disclosure in a country would impact both small and large companies equally. However, small enterprises might not have as many resources to execute changes and train employees. As a result, smaller organisations hire accountants or other external consultants to assist with the transition. Smaller enterprises will incur a greater financial burden than larger ones in this area. However, this study will examine how IFRS disclosures affect organisational performance.
1.3 OBJECTIVES OF THE STUDY
The following are the objectives of this study:
1. To examine the impact of IFRS disclosures on organizational performance
2. To examine the level of compliance with the IFRS disclosure principles by companies in Nigeria.
3. To identify the problems associated with IFRS disclosure in Nigerian organisations.
1.4 RESEARCH QUESTIONS
1. What is the impact of IFRS disclosures on organisational performance?
2. What is the level of compliance with the IFRS disclosure principles by companies in Nigeria?
3. What are the problems associated with IFRS disclosure in Nigerian organisations?
1.5 HYPOTHESIS
HO: There is no significant relationship between IFRS disclosures and organisational performance.
HA: There is a significant relationship between IFRS disclosures and organisational performance.
1.6 SIGNIFICANCE OF THE STUDY
The significance of this study is as follows:
1. The outcome of this study will educate business managers about the impact (negative and positive) of IFRS disclosure on organisational performance in Nigeria.
2. This research will be a contribution to the body of literature in the area of the effect of personality traits on students’ academic performance, thereby constituting the empirical literature for future research in the subject area.
1.7 SCOPE/LIMITATIONS OF THE STUDY
This study will cover the impact (negative and positive) of IFRS disclosure on organizational performance in Nigeria
LIMITATION OF STUDY
Financial constraints: Insufficient funds tend to impede the researcher's efficiency in sourcing the relevant materials, literature, or information and in the process of data collection (internet, questionnaire, and interview).
Time constraints: the researcher will simultaneously engage in this study with other academic work. This, consequently, will cut down on the time devoted to the research work.
1.7 DEFINITION OF TERMS
ORGANISATION: A group of people who form a business, club, etc., together to achieve a particular aim.
DISCLOSURE: The act of making something known or public that was previously secret or private.
PERFORMANCE: The act or process of performing a task, an action, etc.
IFRS: International Financial Reporting Standards.
ORGANISATIONAL PERFORMANCE: comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives).
References
Bradshaw, M., Miller, S., & O'Hanlon, J. (2020). The international financial reporting standards: Global adoption and challenges in the U.S. International Journal of Accounting, 45(1), 23-36. https/doi.org/10.1016/j.ijacc.2020.01.004
International Accounting Standards Board (IASB). (2021). The IASB provides a conceptual framework for financial reporting. IFRS Foundation. https/www.ifrs.org/issued-standards/
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