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Abstract
Purpose - International Financial Reporting Standards (IFRS) were implemented in Nigeria with the intention of providing legitimacy and economic benefits to companies. Nigerian companies are required by law to use IFRS in preparing financial statements effective from 2012. Following IFRS implementation in Nigeria, report indicates companies are experiencing some challenges in complying with the requirements. However, these challenges in IFRS adoption have not been empirically identified to support accounting regulatory policies in Nigeria.
Design/methodology/approach - This study employs a survey questionnaire to identify the challenges in IFRS adoption among Nigerian companies. A self-administered questionnaire was used to collect data in major cities in Nigeria namely; Lagos, Abuja and Benin City.
Findings - The results identified knowledge of IFRS and cost of converting the companies’ accounting systems to IFRS as challenges. Other practical difficulties that the companies are likely to experience include inconsistent regulatory requirements, lack of information technology and estimation of accounting value following IFRS policies.
Originality/value - There is characteristic inconsistency in accounting regulatory requirements in Nigeria. Different government agencies prescribed accounting measurement, recognition and disclosure policies which often differ from IFRS requirements. The companies’ decisions to adopt IFRS is a phenomenon which led to the debate on why some companies adopt or resist to adopt IFRS. Therefore, this research addresses the dearth of knowledge on the challenges influencing IFRS adoption which contribute to adoption or non-adoption.