International Financial Reporting Standards Compliance and Financial Statement Comparability Among Nigerian Banks

Harmonization of financial reporting through IFRS adoption was expected to improve cross-entity comparability of financial statements, yet concerns persist about uneven compliance levels among Nigerian banks, potentially undermining the utility of published accounts for investment and regulatory decisions. This study assessed the level of IFRS compliance and its impact on financial statement comparability among deposit money banks in Nigeria, covering the period from 2021 to 2024. The study was grounded in the harmonization theory of accounting, which posits that standardized reporting frameworks reduce informational differences across entities and jurisdictions. An ex-post facto research design was adopted, with a population of 24 licensed deposit money banks. All 24 banks were included in the study using a census approach. Annual reports were analyzed using a disclosure index adapted from IFRS compliance checklists, and comparability was measured using the Herfindahl Index. Data were analyzed using descriptive statistics and panel ordinary least squares regression. Findings revealed significant variance in IFRS compliance scores across banks, with large banks recording substantially higher compliance levels than mid-tier and small banks. Higher compliance was positively associated with improved financial statement comparability. The study concluded that incomplete IFRS compliance reduces the comparability of financial statements, limiting their usefulness for investors and regulators. It was recommended that the Central Bank of Nigeria should intensify enforcement of IFRS compliance requirements and link regulatory ratings to disclosure quality scores.

Keywords: IFRS compliance, financial statement comparability, deposit money banks, harmonization theory, disclosure index