INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) AND FINANCIAL REPORTING QUALITY OF LISTED MANUFACTURING FIRMS IN NIGERIA

The adoption of International Financial Reporting Standards (IFRS) has been widely promoted as a means of improving the quality, transparency, and comparability of financial reporting across global markets. In Nigeria, IFRS adoption was formally mandated in 2012, with the expectation that it would enhance investor confidence and align the country’s financial system with international best practices. Despite these objectives, doubts remain about the effectiveness of IFRS, particularly in the manufacturing sector, which plays a strategic role in Nigeria’s economy. This study therefore assessed the impact of IFRS adoption on the financial reporting quality of listed manufacturing firms in Nigeria between 2019 and 2024, a period marked by economic instability, exchange rate volatility, inflation, and the COVID-19 pandemic. The study employed an ex-post facto research design, using secondary data from annual reports of listed firms on the Nigerian Exchange Group (NGX). Out of seventy-six (76) listed manufacturing firms, fifty-five (55) were selected through stratified random sampling, based on Krejcie and Morgan’s sample size determination. Data were analyzed using descriptive statistics, Pearson correlation, and multiple regression analysis with SPSS version 23.0. Diagnostic tests confirmed that the regression model satisfied linearity, normality, homoscedasticity, and independence assumptions, ensuring reliable inferences. The results showed that IFRS adoption significantly improved financial reporting quality. Earnings management practices had a positive but controlled relationship with reporting quality, suggesting that IFRS reduced opportunistic accounting behavior. Compliance with IFRS demonstrated a strong positive effect on credibility and comparability of reports, while qualitative attributes such as relevance, faithful representation, and understandability were found to be the most influential drivers of decision-usefulness. The regression model explained 67.1% of the variation in financial reporting quality, with the independent variables jointly significant at the 1% level. Based on these findings, the study concludes that IFRS adoption has enhanced transparency, reduced earnings manipulation, and improved the qualitative characteristics of financial statements in Nigeria’s manufacturing sector. However, challenges such as weak enforcement, governance lapses, and limited technical expertise remain. The study recommends that regulators like the FRCN, SEC, and CBN strengthen compliance monitoring, while firms should invest in internal control systems and staff training to ensure full alignment with IFRS. By addressing these gaps, Nigeria can maximize the benefits of IFRS adoption, strengthen investor confidence, and support sustainable economic development.