The Relevance of International Financial Reporting Standards in the Preparation and Presentation of Financial Statements in Nigeria

Abstract

The language of business is accounting and Financial Reporting is the medium through which the language is communicated. Accounting and Financial reporting should be regulated and this is done by Generally Accepted Accounting Principles (GAAP) comprising of accounting standards, company law, stock market regulations, and so on.

The global GAAP have been seeking to unify accounting and financial reporting worldwide which resulted into the birth of International Financial Reporting Standards (IFRS) issued by the International Accounting Standards (IASs), International Financial Reporting Standards (IFRSs); Standing Interpretations Committee (SICs) pronouncements, and International Financial Reporting Interpretation Committee (IFRICs) guidelines. Thus, Accounting Framework has been shaped by International Financial Reporting Standards (IFRS) to provide for recognition, measurement, presentation and disclosure requirements relating to transaction and events that are reflected in the Financial Statements. IFRS was developed in the year 2001 by the International Accounting Standard Board (IASB) in the public interest to provide a single set of high quality, understandable and uniform accounting standards. However, the study tend to examine the relevance of International Financial Reporting Standard in the preparation and presentation of financial statement in Nigeria

The findings shows that the adoption of IFRS will increase the level of confidence of global investors and investment analysts in the financial statements of companies in Nigeria which will assist them to generate more funds from foreign sources. However, the study recommends that Government should release more fund to Financial Reporting Council(FRC) to educate all stakeholders with special reference to the academic, staff and accounting students who will uphold the future of IFRS in the country and also develop a plan to help properly equip companies for upcoming changes; and the regulators should ensure that there is availability of training facilities and materials for Professional Accountants on  the concept of IFRS and issues relating to its implementation  conversion

Keywords: General Accepted Accounting Principle (GAAP), International Financial Reporting Standard (IFRS), International Accounting Standard Board (IAS), Standing Interpretations Committee (SICs) pronouncements, and International Financial Reporting Interpretation Committees (IFRICs)