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CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

In 1973, the international accounting standards committee (IASC), which is a professional accounting body which comprises of major countries like UK, Ireland, United states (US) Australia, Canada, France, Germany, Japan Mexico, Netherlands agreed to develop a uniform set of accounting principles that would be applicable globally. International Financial Reporting Standards (IFRS) was established and approved by the international accounting standards board (IASB). The purpose of International Financial Reporting Standards (IFRS) is to develop a single set of high quality understandable and enforceable global accounting standards that requires transparent and comparable information in financial statements. On 28th July 2010, the Nigerian Federal Council approved 1st January 2012 as the effective date for convergence of accounting standards in Nigeria with International Financial Reporting Standards (IFRS). On 3rd September, 2010, the Nigerian Accounting Standards Board (NASB) announced a staged implementation of International Financial Reporting Standards (IFRS) as follows, publicly listed entities and significant public interest entities implemented International Financial Reporting Standards (IFRS) by 1st of January 2012 while small and medium size entities implemented International Financial Reporting Standards (IFRS) by 1st January 2014. On 20th July 2011 a workshop was held in Abuja Nigeria and the workshop was about attracting investments into Nigeria.  During this workshop in Abuja, the Nigeria Federal Minister of Trade and Investment, Dr. Olusegun Aganga announced the signing of the law necessary for Nigeria to implement International Financial Reporting Standards (IFRS) in Nigeria.  The necessary law to enact the changes in the Financial Reporting Council of Nigeria Act 2011, had previously been passed by the Nigerian legislature and also been signed into law by the Nigerian president. Financial regulators in Nigeria gave 2012 as the deadline within which the banks operating in Nigeria should migrate to International Financial Reporting Standards (IFRS) from the current General Accounting Principles (GAP). Three banks in Nigeria started preparing their financial report based on International Financial Reporting Standards (IFRS) before it was adopted in Nigeria on 1stJanuary 2012.  These three banks are Guarantee Trust Bank NIG.PLC (GTB), Access Bank NIG.PLC and Zenith Bank NIG.PLC. Over 120 countries are permitted or required to use the International Financial Reporting Standards (IFRS) and over 70 countries adopts it for small and medium scale enterprise.

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