Implementation of International Financial Reporting Standard as a Tool for the Performance of Nigerian Insurance Companies

Abstract

Implementation of international financial reporting standard (IFRS) in terms of quality financial reporting, information disclosure pattern, transparency, auditing, reporting standards, regulatory control and flexibility, corporate governance, and financial scandals have an influence on organizational performance. This study sought to investigate the influence of implementation of IFRS on organizational performance with specific reference to the Nigerian insurance industry. Purposive sampling method was used to select the accountants and auditors of twenty- nine (29) insurance companies listed on the Nigerian Stock Exchange (NSE) market, totaling 58 respondents. The data collection instruments for the study were structured questionnaires designed for the study.  Data analysis was performed with the aid of descriptive statistical tools such as frequencies, percentages and mean, and inferential statistical tools such as Pearson Product Moment Correlation Coefficient and Ordinary Least Squares (OLS) method of estimation. The finding revealed that there is a strong relationship between financial performance and implementation of IFRS. The finding also indicated that implementation of IFRS has a significant influence on investment decision making. This connotes that the implementation of IFRS is a veritable tool to financial performance of Nigerian insurance companies. Subsequently, the study recommended that the management of insurance companies should embrace International Financial Reporting Standard (IFRS) with immediate effect so that the sector can attract both local and foreign investors. Also, National Insurance Commission (NAICOM) should sanction any insurance company fails to implement IFRS on or before the year 2020.