Financial ratios as performance measure: A comparison of IFRS and Nigerian GAAP
Vol. 13, Nr. 1/2014 , p82..97
Author(s):
Zayyad Abdul-Baki
Ahmad Bukola Uthman
Mubaraq Sanni
Keywords:
IFRS, financial ratios, Nigerian GAAP, capital needs theory, signaling theory
Abstract:
This study examinesthe effect of IFRS adoption on the performance evaluation of a case firm usingsome financial ratios selected from four major categories of financial ratios.The study was conducted through comparison of the ratios that were computedfrom IFRS based financial statements and Nigerian GAAP based financialstatements. A One-SampleKolmogorov-Smirnov Test was conducted to test for data normality. Mann-WhitneyU test was employed in testing whether significant difference exists betweenthe pair of ratios when the normality test showed a non-normal distribution ofthe data set. The result of the Mann-Whitney U test showed that there is nosignificant difference between the pair of ratios at 5% level of significance.It was concluded that the disclosure of IFRS compliant set of financialstatements was not attributable to higher performance evaluation, throughratios, of the case firm. Rather, such disclosure could have been motivated by thecapital needs theory or signaling theory.
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http://online-cig.ase.ro/jcig/art/13_1_4.pdf
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