International Financial Reporting Standards (IFRS) Adoption and the Performance of Key Financial Ratios: Evidence from Quoted Deposit Money Banks in Nigeria
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Financial ratio is one of the performance measures used by investors to determine the viability of a
firm. In view of this assertion, this paper investigates the effect of IFRS on key financial ratios of
11 quoted banks in Nigeria. The study addresses the research hypotheses by comparing the key
financial ratios computed under the NGAAP for the three-year period, 2009-2011 and the
corresponding three-year period under IFRS regime, 2013-2015 using the Mann Whitney U-Test.
The study investigates the effect of IFRS on key financial ratios of listed banks in Nigeria.
Evidence from the study shows that at 5 per cent level of significance: (i) Profitability ratios of
listed banks under NGAAP differ significantly from those under the IFRS regime. (ii) There is
statistically significant difference between short-term solvency ratios of quoted banks under
NGAAP and IFRS. (iii) Long-term solvency ratios of quoted banks under NGAAP are significantly
different from those under the IFRS regime. (iv) There is significant difference between investment
ratios, of listed banks, prepared under NGAAP and IFRS. Based on the above results, the study
concludes that adoption of the International Financial Reporting Standard (IFRS) has significant
impact on the performance of financial ratios of quoted deposit money banks in Nigeria
Keywords
H Social Sciences (General), HF5601 Accounting