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Author(s): Ike Romanus Chukwuma (Ph.D.), Florence Ijeoma Ezeilo (Ph.D.).

Volume/Issue: Volume 8, Issue 4 (2025)

Page No: 17-34

Journal: African Journal of Accounting and Financial Research (AJAFR)

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Abstract:

This study examined the effectiveness of Financial Reporting Standards (FRS), specifically compliance with International Financial Reporting Standards (IFRS), in enhancing financial transparency and accountability among energy firms listed on the Nigerian Exchange Group (NGX) between 2015 and 2024. The study focused on two key objectives: to determine the effect of FRS compliance proxied by the IFRS disclosure index on financial transparency, measured by accrual quality, and to assess its effect on accountability, measured by audit quality. Secondary data were collected from the audited annual reports of 12 energy firms over a ten-year period. Descriptive statistics, correlation analysis, panel regression, and logistic regression techniques were employed. The findings revealed that FRS compliance had a statistically significant negative effect on accrual quality (p = 0.003), indicating improved transparency, and a positive significant effect on audit quality (p = 0.007), indicating enhanced accountability. Control variables such as firm size and profitability also showed significant influence in both models. The study concluded that adherence to IFRS plays a critical role in improving the financial reporting integrity of energy firms in Nigeria. It recommends stronger enforcement of FRS policies and incentivizing firms to adopt full disclosure practices that promote trust, attract quality audits, and ensure long-term sustainability.

Keywords:

Financial Reporting Standards, IFRS Compliance, Financial Transparency, Accrual Quality, Audit Quality, Big 4 Auditors, Accountability, Energy Firms.

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