Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD
📄 Download Paper

IFRS 12 (Disclosure of Interests in Other Entities) and Financial Reporting Quality: Evidence from Listed Nigerian Companies

Adebanjo, Olutade David, Siyanbola, Trimisiu Tunji, Akinola, Esther Olubukola, Tiamiyu, Lukumon Olanrewaju

Abstract

Despite Nigeria's adoption of International Financial Reporting Standards , concerns persisted regarding the quality of corporate financial reporting due to inconsistent compliance with disclosure requirements, particularly those relating to interests in subsidiaries, associates, joint arrangements, and structured entities. This study examined the effect of IFRS 12 disclosure requirements on financial reporting quality among listed Nigerian companies. The study adopted an explanatory research design using secondary data obtained from selected non-financial companies listed on the Nigerian Exchange Group between 2015 and 2024. An IFRS 12 Disclosure Compliance Index was employed to measure compliance, while financial reporting quality was assessed using the key qualitative characteristics of financial information. The data were analyzed using descriptive statistics, correlation analysis, and panel regression techniques. The findings revealed that disclosure of interests in subsidiaries had a positive and significant effect on transparency and accountability (β = 0.531, p = 0.000), disclosure of interests in associates had a negative and significant effect on information asymmetry (β = −0.418, p = 0.000), disclosure of interests in joint arrangements had a positive and significant effect on investor confidence (β = 0.467, p = 0.000), while disclosure of interests in structured entities had a positive and significant effect on financial reporting quality (β = 0.389, p = 0.000). Enhanced disclosures were found to improve transparency, reduce information asymmetry, strengthen corporate accountability, and increase investor confidence. The study concluded that the effective implementation of IFRS 12 contributed significantly to improved financial reporting quality in JAFM JAFM JAFM Nigeria. It was therefore recommended that regulatory enforcement should be strengthened, continuous professional training should be encouraged, and corporate governance practices should be enhanced to improve compliance and transparency.

Keywords

Corporate transparencyDisclosure requirementsFinancial reporting qualityIFRS 12.

References

Ahmed, A. S., Neel, M., & Wang, D. (2013). Does mandatory adoption of IFRS improve accounting quality? Contemporary Accounting Research, 30(4), 1344–1372. Aifuwa, H. O. (2022). Corporate disclosure quality and financial reporting transparency in emerging economies. Journal of Accounting and Taxation, 14(2), 45–59. Ayagi, S. R. (2026). Mediating effects of information asymmetry and cost of capital on the relationship between financial reporting quality and investment efficiency of listed deposit money banks in Nigeria. FUDMA Journal of Accounting and Finance Research, 4(1), 163– 183. Ball, R. (2016). International Financial Reporting Standards : Pros and cons for investors. Accounting and Business Research, 36(Suppl. 1), 5–27. Barth, M. E., Landsman, W. R., & Lang, M. H. (2018). International accounting standards and accounting quality. Journal of Accounting Research, 46(3), 467–498. Bischof, J., Daske, H., Elfers, F., & Hail, L. (2021). Disclosure regulation and transparency in capital markets: Evidence from IFRS disclosure requirements. European Accounting Review, 30(4), 701–731. Creswell, J. W., & Creswell, J. D. (2023). Research design: Qualitative, quantitative, and mixed methods approaches (6th ed.). Sage Publications. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman Publishing. Houqe, M. N., Van Zijl, T., Dunstan, K., & Karim, A. K. M. W. (2020). The effect of IFRS adoption and investor protection on earnings quality around the world. The International Journal of Accounting, 47(3), 333–355. IFRS Foundation. (2023). IFRS 12: Disclosure of interests in other entities. IFRS Foundation. IFRS Foundation. (2024). IFRS accounting standards. IFRS Foundation. Institute of Chartered Accountants in England and Wales. (2026). IFRS 12: Disclosure of interests in other entities. ICAEW. International Accounting Standards Board. (2023). Conceptual framework for financial reporting. IFRS Foundation. Iyoha, F. O., & Faboyede, O. S. (2022). IFRS disclosure compliance and financial reporting quality in Nigeria. Nigerian Journal of Accounting Research. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. Johri, A. (2024). Examining the impact of International Financial Reporting Standards adoption on financial reporting quality of multinational companies. International Journal of Financial Studies, 12(4), Article 96 Juliet, M. U., Iredele, O. O., & Adeyemi, S. B. (2026). International Financial Reporting Standards adoption and financial reporting quality in Nigeria: A comparative analysis of manufacturing and banking sectors. European Journal of Applied Business and Management. Nalukenge, I., Nkundabanyanga, S. K., & Ntayi, J. M. (2021). Corporate disclosure quality and financial reporting quality in East African listed firms. Journal of Accounting in Emerging Economies. Olorunfemi, G. S., & Tunji, S. (2025). IAS 37 and financial reporting quality of listed oil and gas companies in Nigeria. FUDMA Journal of Accounting and Finance Research, 3(3), 143– 155. JAFM JAFM JAFM Owoyele, O. A., & Adegbie, F. F. (2026). Adoption of International Financial Reporting Standards and the quality of corporate financial reports of listed companies in Nigeria. International Journal of Latest Technology in Engineering Management & Applied Science, 15(3), 209–225. Saunders, M., Lewis, P., & Thornhill, A. (2023). Research methods for business students (9th ed.). Pearson. Singh, S. K., & Sharma, R. (2025). The impact of contemporary accounting reform on financial reporting quality: Evidence from an emerging economy. Journal of Accounting in Emerging Economies, 15(5), 965–1001. Spence, M. (1973). Job market signaling. Quarterly Journal of Economics, 87(3), 355–374. Uwuigbe, U., Uwuigbe, O. R., & Oyewo, B. (2020). International Financial Reporting Standards adoption and financial reporting quality in Nigeria. Journal of Accounting and Taxation. Uwuigbe, U., Uwuigbe, O. R., Asiriuwa, O., Jafaru, J., & Erin, O. (2023). IFRS disclosure compliance and financial reporting quality of listed firms in Nigeria. Journal of Financial Reporting and Accounting. Yeboah, H., Aboagye-Otchere, F., & Osei, K. A. (2025). Financial reporting quality of financial institutions in Ghana: To what extent do IFRS adoption, audit quality, and audit fees matter? African Journal of Business and Economic Research, 20(1). Yekini, L. S., Temile, S. O., & Enaruna, D. V. (2022). The value relevance of the quality of IFRS- based published financial information of non-financial companies in Nigeria. Journal of Accounting and Taxation, 14(2), 129–135.

More Articles from JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT

Corporate Taxes and Financing Decisions: Evidence from Quoted Consumer Goods Firms in Nigeria

Author: Odey Jacob, T.A. Ngerebo-a

Accounting Software Competencies and Job Market Readiness of Postgraduate Business Education Students in Rivers State Universities

Author: OTOKO, Ibianitogha Paulinus, Dr. OGWUNTE, Peter Clinton, GODPOWER, Yiraodi Joel Ph.D

Determinants of Audit Fees and External Auditor Fees of Listed Agricultural Firms in Nigeria

Author: Nweze Chike L. PhD, Agwaramgbo, Joshua C. PhD

Effect of Intellectual Capital on Financial Performance of Listed Deposit Money Banks in Nigeria

Author: Prof. Ameh Jacob, Samuel Iyere Iheonkhan Ph.D, Ahmed, Saliu

Effect of Financial Attributes on Value of Listed Deposit Money Banks in Nigeria

Author: Erekosima, Tamunotonte, and Samuel Iheonkhan, Iyere