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The wide spread adoption of Ifrs has been promoted by arguments that the benefits out weights the costs. It however remains an empirical question if this is the case for all countries whether develop or developing. While opponents of the adoption of IFRS, for instances, Arm strong (2007), argue that one single set of accounting standard cannot reflect the differences in national business practices arising from differences in institutions and cultures, proponents argue that  substantial benefit can be reaped from greater cross — country comparability of firms’ financial reports. Barth (2007), for instance, argue that by adopting a
common body of international standard, countries can expect to lower the cost of information processing and auditors of financial report can be expected to become familiar with one common set of international accounting standard than with various local accounting standard.

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If the adoption of IFRS expected to lower such cost, then it will be beneficial to Nigeria as a country because of her significant reliance on inflows of foreign capital to finance economic and industrial developments. The argument here is that countries choose to adopt IFRS when they expect to increase the share of foreign capital and trade in their economy. In this sense, even countries with low level of foreign capital and trade can choose to adopt IFRS if they are expecting growth in those factors
None — the — less, the decision to adopt IFRS by some countries arises from the understanding that if (IFRS) is a product with network effect. Network effect is said to exist where users find a product or services more valuable as additional users use the same product or services. As more and more countries adopt IFRS, it becomes more appealing to others that are yet to consider the adoption. This position cannot be generalized especially in the case of some develop countries such as USA that is yet to adopt the standard.

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In countries where the quality of governance institutions is relatively high, IFRS adoption is likely to be less attractive as high quality institutions represent high opportunity and switching cost to adoption of international accounting standards. The opportunity costs arise because in adopting IFRS, countries forgo the benefit of any past and potential future innovation in local reporting standards specific to their economics.
However, in many developing countries, the qualities of local governance institution are low thus are important determinants of the decision to adopt IFRS (Ball et. al, 2000; Leuz et. al., 2003; Ball, 2006). Such countries are likely to suffer from corrupt, slow — moving, or ineffectual governments that are resistance to or are capable of change. In these countries, the opportunity and switching cost are lower and thus, the chance to adopt an external developed body of accounting s:’’, present advantage. Thus among these countries with less developed institution of Nigeria, the decision to adopt IFRS is likely to be driven by the lower opportunities and switching cost.

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As companies compete globally for scarce resources, investors and creditors as well as multinational companies are required to bear the cost of reconciling financial statements that are prepared using national standards. It was argued that a common set of practices will provide a “level playing field” for all companies worldwide (Murphy, 2000). IFRS are standards and interpretations adopted by the International Accounting Standards board (IASB). They include; International Financial Reporting standards (IFRS), International Accounting Standards (lAS) and interpretation originated by the International Financial Reporting Standards interpretation Committee (IFRSIC) (Oyedele, 2011). IFRS represent a single set of high quality, globally accepted accounting standards that can enhance comparability of financial reporting across the globe. This increased comparability of financial information could result in better investment decisions and ensure a more optimal allocation of resources across the global economy (Jacob and Madu, 2009). Cai and Wong (2010) posited that having a single set of internationally acceptable financial reporting standards will eliminate the need for restatement of financial statements, have ensure accounting diversity among countries, thus facilitating cross-border movement of capital and greater integration of the global financial markets.

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Esptein’ (2009), emphasized the fact that universal financial reporting standards will increase market liquidity, decrease transaction costs for investors, lower cost of capital and facilitate international capital formation and flows various conducted on the adoption of IFRS at country level indicated that countries that adopt IFRS experienced huge increases in Direct Foreign Investment (DFI) flows across countries (Irvine and Lucas, 2006). Cai and Wong (2010), in a study of global capital markets demonstrated that capital markets of countries that had adopted IFRS recorded high degree of integration among them after their IFRS adopted compared 11th the period before adoption. In a study on financial data of public listed companies in 15 member states of the European Union (EU) before and after full adoption of IFRS in 2005, Chai at al (2010), found that majority of accounting quality indicators improved after IFRS adoption in the EU.
In a study on the question of usefulness of IAS/IFRS for developing countries using a case study of Zimbabwe, Chamisa (2000), analyzed the impact of the adoption of IASB standards on the accounting practices of listed companies. Result of the study revealed that these standards have particular importance for developing countries with emerging financial market. In an analysis of the IAS/TFRS implementation process in developing countries using Armenia as the analytical ramework McGee (1999), show that this process poses difficulties, which can be ercorne by concerted efforts in training and information dissemination about the v standards.
Alp and Ustanclag (2009) studied the development process of financial reporting standards around the world and its practical result in developing countries found that Turkey had encountered several complications in the adoption of IFRS. Such complications include the complex structure of the international standards, potential knowledge shortfall and other difficulties in the application and enforcement issues.
Similarly, in a study on adoption of IFRS at firm level, Meeks and Swann (2O09) demonstrated that firms adopting IFRS had exhibited higher accounting 1 quality in the post-adoption period than they did in the pre-adoption period. In a
study of financial data of firms covering 21 countries, Barth (2008), confirmed that firms applying IAS!IFRS experienced an improvement in accounting quality between the pre-adoption and post-adoption periods. Latridis (2010), concluded on the basis of data collected from firms listed on the London Stock Exchange that IFRS implementation has favorably affected the financial performance (measured by profitability and growth potentials).
There is also growing number of studies that question the relevance of IFRS in developing and emerging economies. Irvine and Lucas (2006), also report that the development of globalizes set of accounting standards provides other benefits that are not so relevant to developing and emerging nations. The adoption of IFRS will save multinational corporations the expense of preparing more than one set of accounts for different national jurisdictions, the professional status of accounting bodies will be enhanced and the big accounting firms will benefit in their effort to expand the global market for their services. Perera (1989) posted that accounting information produced according to developed countries accounting system is not relevant to the decision models of less developed countries. As evident from the foregoing, a good number of studies carried out in different countries have high highlight the benefit of having single set of financial reporting standards across the globe. Few of the studies have given contradictory views questioning the relevance of IFRS adoption in developing and emerging economies such as Nigeria.


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