Accountants’ Readiness and the Quality of Financial Reporting Under IFRS 18: Evidence from Nigeria

Abstract

This study assessed Accountants’ Readiness and the Quality of Financial Reporting under IFRS 18: Evidence from
Nigeria. Adoption of IFRS 18 will introduce a significant structural change to income statement presentation and
mandatory disclosures which can create challenges for financial reporting quality in Nigeria. Many studies
concentrated on IFRS adoption, without assessing the influence of knowledge and readiness in applying newer
standards such as IFRS 18. A gap between these new standard and domestic accounting competencies and
readiness may undermine the transparency and comparability of corporate financial reporting and disclosures in
Nigeria. The paper was hinged on institutional and stakeholder’s theories. The study adopted a survey research
design using a quantitative approach. A total of 104 respondents were selected using purposive sampling
technique. The respondents were professional accountants drawn from selected organisations in Nigeria. Primary
data were retrieved using a structured questionnaire designed on a five-point Likert scale. Data were analysed
using correlation and regression analysis. The findings showed that IFRS 18 has a positive and significant effect
on financial reporting quality with correlation coefficient of 0.522 and p-value of 0.000. However, the readiness of
accountants has a stronger influence compared to knowledge alone with correlation coefficient of 0.468 and
significance value of 0.000. This means that even when accountants understand IFRS 18, lack of proper training
and institutional support can still reduce reporting quality as expected by its introduction. The study concludes that
both knowledge and readiness are important, but readiness plays a more critical role in achieving quality financial
reporting. The study then recommends continuous training, stronger institutional support, and improved capacity
building for accountants in Nigeria as the Commencement period for IFRS 18 implementation approaches.