Challenges in Adoption of Ifrs in Nigeria

3452 Words May 11th, 2013 14 Pages
JORIND (9)1 June, 2011. ISSN 1596-8303. www.transcampus.org/journals. www.ajol.info/journals/jorind

THE CHALLENGES OF ADOPTING INTERNATIONAL FINANCIAL REPORTING SYSTEM IN NIGERIA Anthony O. Garuba Department of Accounting and Finance, Western Delta University, Oghara, and Pat Donwa Department of Accounting, University of Benin, Benin City E-mail: anthonygaruba@yahoo.com Abstract Nigeria is going to adopt International Financial Reporting Standard (IFRS) from 1st January 2012. Globalization and Information and Communication Technology (ICT) has reduced the world to a global village. This has given rise to the continuous integration of the world economy and capital markets which has in turn given rise to increase in the interdependence of
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EU member states may however, permit non-listed companies in their jurisdiction to use IFRS. This has been the practice in EU countries like the United Kingdom, Australia, Ireland, Slovenia and France. While in countries such as Malta, Slovakia and Cyprus which are EU member states, non-listed entities are required to prepare IFRS based financial statements. Other EU member states likePoland, Lithuania and Latvia require non-listed companies to use local GAAP and prohibit them from using IFRS. This goes to show the extent to which countries are careful about adopting IFRS in its totality.

Countries that have adopted IFRS in its totality have done so in a gradual and coordinated manner, allowing for transition periods. For example in Brazil financial institutions had between 2007 and 2010 to comply with IFRS. As for Korea, the Financial Supervisory Commission and the Accounting Standards Board of the Republic of Korea, after years of consultations and ground work, announced in 2009 to permit all companies other than financial institutions to apply IFRS as adopted by Korea, but set 2011 for IFRS to become mandatory in the country. In the case of India, it commenced IFRS transition in early 2007 when the Institute of Chartered Accountants of India formed an IFRS convergence task force to look into the various convergence issues and prepare a road