IFRS AND AUDIT QUALITY: A DISCRETIONARY MODEL APPROACH
This study examined the relationship between International Financial Reporting Standards (IFRS) and audit quality in Nigeria. With the growing adoption of IFRS, interest has risen about the efficiency of audits regarding accurate financial reporting. To actualize this, we investigated the impact of...
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| Format: | Article |
| Language: | English |
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Kwara State University, Malete Nigeria
2024-01-01
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| Series: | Malete Journal of Accounting and Finance |
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| Online Access: | https://majaf.com.ng/index.php/majaf/article/view/118 |
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| author | Eniola Ayisat Sulaiman Wasiu Ajani Musa Abubakar Sadiq Kasum |
| author_facet | Eniola Ayisat Sulaiman Wasiu Ajani Musa Abubakar Sadiq Kasum |
| author_sort | Eniola Ayisat Sulaiman |
| collection | DOAJ |
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This study examined the relationship between International Financial Reporting Standards (IFRS) and audit quality in Nigeria. With the growing adoption of IFRS, interest has risen about the efficiency of audits regarding accurate financial reporting. To actualize this, we investigated the impact of IFRS adoption on audit quality and identified challenges and opportunities for improvement. This study focused on companies quoted in the financial services sector of the Nigerian Exchange Group market between 2006 and 2022. A sample of twenty (20) financial institutions comprising of ten (10) banks and ten (10) insurance companies were selected, and data from audited annual reports was subjected to a static panel regression technique. Findings from the estimated regression revealed the existence of a positive connection between IFRS adoption and discretionary accruals based on the Modified Jones Model. Conversely, the regression coefficient revealed a significant negative relationship between the variables of this study when the discretionary expenses were considered. Based on the findings, audit quality has not improved after the adoption of IFRS. Equally, the adoption of IFRS has reduced discretionary expenses significantly. This study recommended among others that regulatory authorities should enforce appropriate application of accounting standard in order to reduce discretionary accruals and avoid manipulation of discretionary expense.
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| format | Article |
| id | doaj-art-3f5f14d51f834a5993476414f7d529a0 |
| institution | Kabale University |
| issn | 2735-9603 |
| language | English |
| publishDate | 2024-01-01 |
| publisher | Kwara State University, Malete Nigeria |
| record_format | Article |
| series | Malete Journal of Accounting and Finance |
| spelling | doaj-art-3f5f14d51f834a5993476414f7d529a02025-02-10T23:06:26ZengKwara State University, Malete NigeriaMalete Journal of Accounting and Finance2735-96032024-01-0141IFRS AND AUDIT QUALITY: A DISCRETIONARY MODEL APPROACHEniola Ayisat Sulaiman0Wasiu Ajani Musa1Abubakar Sadiq Kasum2University of Ilorin, IlorinUniversity of Ilorin, IlorinUniversity of Ilorin, Ilorin This study examined the relationship between International Financial Reporting Standards (IFRS) and audit quality in Nigeria. With the growing adoption of IFRS, interest has risen about the efficiency of audits regarding accurate financial reporting. To actualize this, we investigated the impact of IFRS adoption on audit quality and identified challenges and opportunities for improvement. This study focused on companies quoted in the financial services sector of the Nigerian Exchange Group market between 2006 and 2022. A sample of twenty (20) financial institutions comprising of ten (10) banks and ten (10) insurance companies were selected, and data from audited annual reports was subjected to a static panel regression technique. Findings from the estimated regression revealed the existence of a positive connection between IFRS adoption and discretionary accruals based on the Modified Jones Model. Conversely, the regression coefficient revealed a significant negative relationship between the variables of this study when the discretionary expenses were considered. Based on the findings, audit quality has not improved after the adoption of IFRS. Equally, the adoption of IFRS has reduced discretionary expenses significantly. This study recommended among others that regulatory authorities should enforce appropriate application of accounting standard in order to reduce discretionary accruals and avoid manipulation of discretionary expense. https://majaf.com.ng/index.php/majaf/article/view/118International Financial Reporting StandardsAudit QualityDiscretionary AccrualsDiscretionary ExpensesThe discretionary modelThe financial services sector |
| spellingShingle | Eniola Ayisat Sulaiman Wasiu Ajani Musa Abubakar Sadiq Kasum IFRS AND AUDIT QUALITY: A DISCRETIONARY MODEL APPROACH Malete Journal of Accounting and Finance International Financial Reporting Standards Audit Quality Discretionary Accruals Discretionary Expenses The discretionary model The financial services sector |
| title | IFRS AND AUDIT QUALITY: A DISCRETIONARY MODEL APPROACH |
| title_full | IFRS AND AUDIT QUALITY: A DISCRETIONARY MODEL APPROACH |
| title_fullStr | IFRS AND AUDIT QUALITY: A DISCRETIONARY MODEL APPROACH |
| title_full_unstemmed | IFRS AND AUDIT QUALITY: A DISCRETIONARY MODEL APPROACH |
| title_short | IFRS AND AUDIT QUALITY: A DISCRETIONARY MODEL APPROACH |
| title_sort | ifrs and audit quality a discretionary model approach |
| topic | International Financial Reporting Standards Audit Quality Discretionary Accruals Discretionary Expenses The discretionary model The financial services sector |
| url | https://majaf.com.ng/index.php/majaf/article/view/118 |
| work_keys_str_mv | AT eniolaayisatsulaiman ifrsandauditqualityadiscretionarymodelapproach AT wasiuajanimusa ifrsandauditqualityadiscretionarymodelapproach AT abubakarsadiqkasum ifrsandauditqualityadiscretionarymodelapproach |