Creative Accounting Practices among Nigeria Listed Commercial Banks: Curtailing Effect of IFRS Adoption

Abstract

This study examined creative accounting practices among Nigeria listed commercial banks: curtailing effects of IFRS. Specifically, it examined the effect of IFRS recognition, IFRS measurement and IFRS disclosure requirements on creative accounting practices. The population of the study comprised of all the fifteen (15) listed commercial banks as at July, 2016, located in Akure, Ondo State. Simple random sampling technique was adopted to select the sample size of ten (10) listed commercial banks, out of the fifteen (15) listed in Nigeria Stock Exchange (NSE). The study made use of primary data obtained through questionnaire administered to 98 respondents of the ten (10) sampled listed commercial banks. The said primary data was analysed using quantitative approach through Statistical Package for Social Science (SPSS)- Version 21 software. The formulated hypotheses were tested using Multiple Regression Model method. Result shows that in (Ho₁) P-value (0.000) < α (38.342) and F-value (38.342) > the critical value F^* (2.829), hence, the hypothesis is rejected.  Additionally, it was observed from hypothesis two (Ho₂), that the P-value (0.004) < α (32.871) and F-value (32.871) > the critical value F^* (2.829).   This means that the hypothesis is also rejected.   In respect of hypothesis three (Ho₃), the P-value (0.001) < α (42.717) and F-value (42.717) > value F^* (2.829) .This is an indication that the hypotheses cannot be accepted.  The study, therefore, concludes that compliance with IFRS recognition, measurement and disclosure requirements each has significant effects on curtailing creative accounting (manipulation of assets and equity values, income and expenses figures and non-timely recognition of losses) practices among Nigeria listed commercial banks. It was therefore recommended that each bank should continue to educate, train and re-train their staff to refresh their knowledge on application of IFRS requirements and on emerging issues on IFRS. Additionally, each commercial bank should allow local preparation of the annual financial statements of the branch, for further consolidation at the head office. It is expected that the conclusions drawn from the study and recommendations made thereof will benefit other private sector entities in Nigeria and other nations of the world.

Keywords: Creative Accounting, Listed Commercial Banks, IFRS Recognition, Measurement and Disclosure Requirements, Assets and Equities.