European Journal of Accounting, Finance and Investment

Effect Of Mandatory International Financial Reporting Standards On Stock Prices Of Manufacturing Firms Listed On The Nigerian Stock Market

CHUKWUANI, Victoria Nnenna, PhD

Department of Accountancy, Faculty of Management Sciences, Enugu State University of Science & Technology, Enugu

OGBU, Moses Onwe, M.Sc

Department of Accountancy, Benue State Polytechnic, Ugbokolo

MADUKWE, Chimezie James, CNA

Department of Accountancy, Akanu Ibiam Federal Polytechnic Unwana, Afikpo

Keywords: Mandatory International Financial Reporting Standards, Stock Prices, Manufacturing Firms, Nigerian Stock Market

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Abstract

The objectives of this study therefore is to ascertain the effect of mandatory IFRS on stock prices of manufacturing firms
listed on the Nigerian stock market and to determine whether there is a significant difference in stock prices given the mandatory
adoption of IFRS by firms in 2012. The study adopted the ex-post facto research design as it relied on historic data obtained from
the website of Nigerian Stock Exchange from 2010 - 2015. The period from 2010 to 2015 include two periods of pre-adoption period
(2010 - 2012) and post - adoption period (2013 - 2015). The study used firm-level data bothering on stock prices gathered from the
website of the Nigerian Stock Exchange. Stock prices data exist in daily, weekly and monthly forms. This study adopts the monthly
stock prices and using the December month as the closing price of the stocks in each of the periods. All the manufacturing firms
listed on the Nigerian Stock Exchange formed the population of this study while the sample constitutes of twenty one (21) firms
classified under the Consumer Goods industry sector of the Nigerian Stock Exchange. All variables for the sampled firms are
observed for each cross-section and each time period, resulting in a total number of one hundred and twenty six (126) observations.
The study used a linear regression equation as well as the parametric paired samples t-test model structured in a way to enhance
comparisons of stock prices between the pre-IFRS and post-IFRS periods. Findings from the study therefore implies that the
mandatory adoption of IFRS has a positive and significant effect on stock prices of manufacturing firms listed on the Nigerian Stock
Exchange and that there is a significant difference in stock prices of manufacturing firms given the mandatory adoption of IFRS in
2012.