IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
Vol. 1 No.8, 2015

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Awareness and Application of International Financial Reporting Standard among Small and Medium Enterprises in NorthCentral Nigeria

Abiola Abosede Solanke, Kabiru Dandago Isa, Paul Femi Fashagba

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Abstract

Background: Studies in Nigeria have focused on different dimensions of the International Financial Reporting Standard (IFRS) adoption. However, insufficient attention has been paid to the level of IFRS awareness and application among Small and Medium Enterprises (SMEs) in Northern Nigeria particularly in the North-Central zone. Objective: To examine the extent of awareness and application of IFRS by SMEs in North- Central Nigeria. Methods: The descriptive survey design was adopted for the study. Samples were drawn from the list of registered SMEs in three randomly selected States, namely Kwara, Kogi, and Niger States. Using the Cochran (1977) sample size determination formula, a sample size of 307 was determined for the study. A multi-stage random sampling technique was employed to select eligible SMEs owners. Data collection was carried out by self-administered questionnaire. The dependent variable is financial reporting quality. The independent variable in the study is the adoption of IFRS of SMEs. The Epidata computer software was used for data entry. The statistical analyses were performed at the univariate, bivariate and multivariate levels using Stata version 12. Results: Findings showed that 60.2% of the SMEs are not aware of IFRS; 67.5% of the entities do not prepare any financial statements based on IFRS for SMEs; 2.9% prepared statement of financial position only; and 4.4% prepared statements of financial position and at least one other type of account required by the IFRS for SMEs. The total adoption of IFRS for SMEs that is preparation of complete set of financial position was the only variable that resulted in a positive change in financial reporting quality (4 ? = 1.5614, p<0.05). Conclusions: Poor attitude is the underlying barrier to the adoption of IFRS

keywords:

Awareness; attitude, IFRS; SMEs, financiaL

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