Value relevance of accounting information of pre-and post-adoption of IFRS among Nigerian listed firms

The effect of International Financial Reporting Standard (IFRS) on the value relevance of accounting information in Nigeria has not been well researched. This study fills the gap in the body of knowledge by investigating the effect of IFRS on the value relevance of accounting disclosures among Nigerian listed firms over the period 2009 to 2013, covering the periods before and after the adoption of IFRS. This study used a sample of 126 firms listed on the Nigerian stock market using price and return models. This study found a significant increase in value relevance after IFRS adoption for assets and liabilities; selected assets and liabilities (current assets, fixed assets, current liabilities, and non-current liabilities), accruals, and book value for both price and return models. A significant increase in value relevance was also reported for book value, net income and operating expense under the price model. The findings on book value, earnings and dividends regression for both price and return models report a significant increase after IFRS adoption. However, a decline in value relevance after IFRS adoption was reported for net income and operating expenses and selected net income and expenses under the return model. This study adds to the literature by providing empirically based conclusions on the effect of IFRS on the quality of financial reporting in Nigeria. Furthermore, the study contributes to the theory by investigating the application of efficient market hypothesis (EMH) to financial reporting in emerging economy. This study benefits investors, policy makers, regulators and government concerning the effects of IFRS on financial reporting in Nigeria.