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How Prepared are Nigerian Small and Medium Scale Enterprises (SMEs) for the Adoption of International Financial Reporting Standards (IFRS)? Evidence from a Survey

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  • Babajide Michael Oyewo

Abstract

January 2014 was set to be the take-off period for Nigerian SMEs to adopt IFRS. As Nigeria enters the transition phase of IFRS adoption for SMEs, there is a need to assess the level of preparedness for adoption, which is the focus of this paper. The population of the study is the SME proprietors in Nigeria, but samples were selected from Lagos, because of constraints in covering the entire 36 states of the country. Data was collected through self-administered questionnaires, by requesting SME proprietors to provide ranking on a 1-4 scale, on issues stemming from IFRS adoption by SMEs. Cluster sampling technique was used to administer 200 copies of the research instrument in two cluster sites having a proliferation of SMEs in Lagos— Alaba International Market in Ojo local government and Computer Village in Ikeja.141 copies of the instrument were retrieved but 136 copies found usable for analysis. Percentage Analysis, Mean, Standard deviation and factor analysis (using the principal component analysis extraction method) were used for analysis. A model for preparedness for IFRS adoption was formulated by regressing the factors influencing adoption on the level of preparedness. Results show that there is the need for IFRS adoption by SMEs in Nigeria because of the expected benefits to accrue. The level of preparedness for IFRS adoption (M= 2.32, SD=1.032) was however found to be low.

Suggested Citation

  • Babajide Michael Oyewo, 2015. "How Prepared are Nigerian Small and Medium Scale Enterprises (SMEs) for the Adoption of International Financial Reporting Standards (IFRS)? Evidence from a Survey," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 1(1), pages 45-64, March.
    • Handle: RePEc:khe:scajes:v:1:y:2015:i:1:p:45-64
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    References listed on IDEAS

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    3. Zeghal, Daniel & Mhedhbi, Karim, 2006. "An analysis of the factors affecting the adoption of international accounting standards by developing countries," The International Journal of Accounting, Elsevier, vol. 41(4), pages 373-386, 012.
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    More about this item

    Keywords

    Accounting standard; IFRS adoption; Nigeria; Small and Medium Enterprises;
    All these keywords.

    JEL classification:

    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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