THE INFLUENCE OF NIGERIA ACCOUNTING STANDARD BOARD IN FINANCIAL REPORTING

Project Abstract

The Nigerian Accounting Standards Board (NASB) plays a critical role in shaping financial reporting practices in Nigeria. This study examines the influence of the NASB in financial reporting within the Nigerian context. With the aim to understand the impact of the NASB on financial reporting quality and transparency, this research delves into the regulatory framework set by the NASB and its enforcement mechanisms. By analyzing the extent to which companies adhere to the accounting standards issued by the NASB, this study aims to provide insights into the effectiveness of the NASB in enhancing financial reporting practices in Nigeria. The research methodology includes a mix of qualitative and quantitative approaches. Data will be collected through interviews with key stakeholders in the financial reporting process, such as accounting professionals, auditors, and regulators. Additionally, financial statements of selected companies will be analyzed to assess the level of compliance with NASB standards. The study will also explore the perceptions of stakeholders regarding the influence of the NASB on financial reporting quality and transparency. The findings of this research are expected to contribute to the existing literature on the role of standard-setting bodies in financial reporting. By shedding light on the effectiveness of the NASB in Nigeria, this study can inform policymakers, regulators, and accounting professionals on areas for improvement in financial reporting practices. Furthermore, the results of this research can guide future developments in accounting standards and enforcement mechanisms in Nigeria. Overall, this study seeks to provide a comprehensive analysis of the influence of the NASB in financial reporting in Nigeria. By examining the regulatory framework, compliance levels, and stakeholder perceptions, this research aims to offer valuable insights into the role of the NASB in shaping financial reporting practices. Ultimately, the findings of this study can help enhance the quality and transparency of financial reporting in Nigeria, thereby contributing to improved decision-making processes for investors, regulators, and other stakeholders in the Nigerian economy.

Project Overview

<p> </p><p><strong>INTRODUCTION</strong></p><p><strong>BACKGROUND OF THE STUDY</strong></p><p>According to Ilaoya (2005), financial reports are the means of communicating to interested parties, information on the resources, obligation and performance of the business entity. These are described as the end product of accounting transactions or economic events aimed to providing qualitative and quantitative financial information to evaluate and predict the performance of the business entity. Financial reporting inductees not only financial statements but also other means of communicating information that relates direct or indirectly to the information provided by the accounting system. That is, information about an entity’s resources, obligation and earning.</p><p>In Nigeria, there are various regulatory requirements that must be considered in the preparation of financial reports. They are as follows;</p><p>The Companies and Allied Matters Act, 1990 as amended</p><p>The Accounting Standards produced by the Nigerian Accounting Standards Board (NASB).</p><p>Subsidiary of CBN presidential Guidelines, Stock exchange.</p><p>The General Accepted Accounting Practice (GAAP)</p><p>Other statutory requirements such as Banks and other financial institutions Decree (BOFID) 1991, the insurance 1991.</p><p>Accounting standards are rules comprising of best of practices issued from time to time by a duly empowered body to reviewing existing accounting principles and practices and recommend the best through a standard. In Nigeria, the standard setting body is the Nigeria Accounting Standard Board (NASB), which was set up by the institute of Chartered Accounting of Nigeria. The board was taken over by the government and formally inaugurated on September 9, 1982.</p><p>The National Assembly of the federal republic of Nigeria enacted the Nigeria Accounting Standard Board Act on July 10, 2003. The explanatory memorandum to the act shows that the act seeks to establish NASB to be charged with the responsibility and publishing accounting standards to be observed in the preparation of financial statement and to promote and enforce compliance with accounting standard, developed and reviewed by the board.</p><p>The Board has the following objectives;</p><p>To formulate and publish, in the public interest, accounting standards to be observed in the preparation of financial statements and to promote the general acceptance and adoption of such standards by preparer and users of financial statements;</p><p>To promote and sponsor legislation when necessary in order to ensure that the standards developed and published by the Board receive nationwide acceptance, adopting and compliance;</p><p>To review, from time to time, the standards developed by the Board in the light of changes in the socials, economic and political environment.</p><p>The need for independent standard setting body was what formed the inauguration of Nigerian Accounting Standard Board with fourteen member bodies as follows;</p><p>Central Bank of Nigeria</p><p>Corporate Affairs Commission</p><p>Federal Inland Revenue Service</p><p>Nigeria Deposit Insurance Corporation</p><p>Security and Exchange Commission</p><p>Auditor – General of the Federation</p><p>Accounting – General of the Federation</p><p>Institute of Chartered Accounting of Nigeria</p><p>Association of National Accountants of Nigeria</p><p>Federal Ministry of Commerce</p><p>Chartered Institute of Taxation of Nigeria</p><p>Federal Ministry of Finance</p><p>Nigeria Accounting Teachers Association</p><p>Nigeria Association of Chambers of Commerce, Industries, Mines and Agriculture.</p><p>So far, the Board has issued up to 23 Statements of Accounting Standards and about 26 exposure drafts. An exposure draft is a standard in the making. It is usually issued for a period of six months so as to allow the public and others to make meaningful contribution to the proposed standard.</p><p><strong>STATEMENT OF PROBLEM</strong></p><p>The Nigeria Accounting Standard Board has produced different accounting standards to ensure a high degree of standardization in the published financial reports in Nigeria. the standards are considered in the preparation of these reports but then the question arises.</p><p>How far has the Nigerian Accounting Standards Board achieved its aim in ensuring standardization in the financial reports produced in the country? Could the level of achievement be as a result of compliance or otherwise, with the standard.Virtually all the financial reports are prepared based on the historical cost accounting with rate at which price level changes in recent time. One wonders how these reports which do not the changes in price levels will meet the needs of various users.</p><p>The problem necessitated the research into the influence of the Nigeria Accounting Standard Board on financial reporting in Nigeria.</p><p><strong>OBJECTIVE OF THE STUDY</strong></p><p>The objective of this research work are:</p><p>To check the compliance or otherwise, of the accounting standards by business entities.</p><p>To study the effects of the various accounting standards produced by Nigerian Accounting Standard Board on the financial report.</p><p>To draw conclusion on their effectiveness and make recommendation where necessary.</p><p><strong>SIGNIFICANCE OF THE STUDY</strong></p><p>Every business organization uses the financial reports to communicate information about its performance, resources and obligations to interest parties. The reports are prepared in such a way as to meet the different needs of these parties.</p><p>It is expected that, at the end of the research work, solutions would be provided to the problem, recommendations on the effectiveness of the standards will be made and also if need be, suggest the review of the standards which may no longer meet the present day requirement of the financial reports.</p><p><strong>SCOPE OF THE STUDY</strong></p><p>The study is geared towards reviewing the effects of the standards provided by the Nigerian Accounting Standard Board financial reports in Nigeria. the research will cover how the standards have impacted the quality of information communicated to the users through the financial reports. The researcher is also looking into how the board can copy out its duties more effectively so as to improve financial reporting in the country. The prepare r of the report will not be left out, as the project is aimed at studying how the standards could be used to improve their reporting skills and also to reflect the true and fair view of the position of organization in all financial reports.</p><p><strong>LIMITATION OF STUDY</strong></p><p>It should be noted that this study is limited to only Accounting Standards produced by the Nigeria Accounting Standard Board, as its affects financial reporting in the country. Other regulatory requirements (and frameworks) are not considered.</p><p>In gathering data needed for this research work, the scope of the study might be limited by the knowledge of the respondents, their unwillingness to give out data and also validity of the data derived/collected. Also, the staff of the Board might not be able to give the research enough attention since they have to carry out their primary duties in their various offices.</p><p>Data analysis is another limitation. The statistical methods and samples that may/would be used in the analysis might not represent whole population.</p><p>HYPOTHESES</p><p>The study is concerned with testing of the following hypotheses;</p><p>Ho:The accounting standards have not improved the quality of financial reports in Nigeria.</p><p>H1:The accounting standards have improved the quality of financial reports in Nigeria.</p><p>Ho:Non-enforcement of strict compliance measures by the board to ensure conformity with the standards does not have negative effect on financial reporting in Nigeria.</p><p>H1:Non-enforcement of strict compliance measures by the board to ensure conformity with the standards has negative effect on financial reporting in Nigeria.</p><p>Ho:The Standards do not cover all areas of financial reporting and therefore, do not meet up with time challenges.</p><p>H1:The Standards do not cover all areas of financial reporting and meet up with time challenges.</p> <br><p></p>