AN INVESTIGATION INTO THE CHALLENGES OF IFRS ADOPTION AND IMPLEMENTATION AMONGST SMALL AND MEDIUM SCALE ENTERPRISE OWNERS IN NIGERIA
ATTENTION:
BEFORE
YOU READ THE CHAPTER ONE OF THE PROJECT TOPIC BELOW, PLEASE READ THE
INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN
GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL PROJECT COSTS N5,000
ONLY. THE FULL INFORMATION ON HOW TO PAY AND GET THE COMPLETE PROJECT IS AT THE
BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08068231953, 08168759420
AN
INVESTIGATION INTO THE CHALLENGES OF IFRS ADOPTION AND IMPLEMENTATION AMONGST
SMALL AND MEDIUM SCALE ENTERPRISE OWNERS IN NIGERIA
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
TO THE STUDY
Small and
medium scale enterprises are the engine that drives most economies of the
world. Their importance to the economy of Nigeria cannot be overlooked. SMEs
activities-both international and local have contributed immensely to the gross
domestic product in the economy as they participate in manufacturing,
importation, exportation, employment etc.According to Gono (2013), SMEs
contribute to output and employment creation and theyare also a nursery for the
larger firms of the future. The most successful developing country overthe last
50 years, Taiwan is built on a dynamic SME sector. Small and medium enterprises
(SMEs)have played a significant role in Taiwan‟s economic development in
expanding exports andproviding jobs.
The need to
harmonize accounting reporting standards for organizations operating around the
world has prompted the Central bank of Nigeria to set January 2014 as deadline
for adoption of the International Financial Reporting Standard (IFRS) for small
and medium scale enterprises in Nigeria. This mandate has posed a lot of
questions on the awareness, readiness and financial ability of SME operators to
comply with the new accounting reporting standards. This new era where
globalization is fast becoming real, it is imperative to investigate the effect
the IFRS adoption possess on small and medium scale enterprises as they have a
key role to play in international trade in Nigeria. According to OECD (2012),
the level of which globalization affect SMEs is a function of their engagement
in exporting activities. This is particularly the case of SMEs in Nigeria, as
Nigeria is a major exporter of agricultural produce.
The
introduction of IFRS in Nigeria and the current state of globalization simply
means that SMEs cannot continue with local standards for financial reporting
purposes. For SMEs involved in international trade with subsidiaries and
franchises in other countries to be more successful internationally, it must
comply with the IFRS guidelines. As a result of the harmonization of accounting
reporting standards, the adoption of the IFRS has been widely accepted by
various countries of the world. However, the full IFRS promulgated by the IASB
has been found to be irrelevant due to the disclosure requirements, which are
extensive for SMEs. For this reason, the IASB promulgated a simplified version
of the IFRS applicable to SMEs-the IFRS for SMEs.As a result of broad
discussion of SMEs and common standards for SMEs worldwide, theInternational
Accounting Standard Board (IASB) introduced an International Financial
ReportingStandard (IFRS) designed for use by small and medium-sized entities
(SMEs) on July 9, 2009 (International Accounting Standards Board, 2010). The
introduction of IFRS specifically for SMEswas necessitated by many challenges
faced by these entities in adopting full IFRSs in financialreporting, the main
of which was the excessive disclosure requirements, based on a
cost-benefitanalysis for SMEs (Nazri, 2010).
1.2
STATEMENT OF THE PROBLEM
In Nigeria,
the greatest challenge facing small and medium scale enterprises is access to
finance. SMEs as the engine of the economy have the full potentials to turn the
economy around for the better, but their greatest challenge still remains
underfinance.
With the
introduction of IFRS, SMEs in Nigeria are mandated to adopt the new reporting
standard from January 2014. The awareness, acceptance and implementation of the
new IFRS guidelines for SMEs are challenges for many African countries
(Fortuin, 2011). Many businesses still do not understand what options are
available andhow IFRS for SMEs interplay to their benefit (Fortuin, 2011). This
is an indication of the lack ofawareness of the benefits accrued through the
use of IFRS for SMEs which may in turn inhibitSMEs from adopting them. The
results of the survey by Deloitte in 2009 revealed that 43% of SMErespondents
were not aware of the IASB's standard IFRS for SMEs.
Poor
financial management and book-keeping are two major barriers confronting SMEs
when it comes to accessing funds from financial institutions and government
agencies. A study conducted by Gono (2013) revealed that most SMEs fail due to
poor financial management and reporting. So it is important for SMEs to follow
the current trend of financial reporting and enjoy the full benefits that are
associated.
1.3
OBJECTIVES OF THE STUDY
The main aim
of the study is to investigate the challenges facing the adoption and
implementation of the IFRS amongst small scale enterprise owners in Ikeja,
Nigeria. Specific objectives of the study are:
To determine
the level of awareness of IFRS guidelines amongst SME operators in Ikeja.
To examine
the extent to which IFRS is adopted by small and medium scale enterprises in
Ikeja, Lagos state.
To ascertain
the challenges of implementation of the IFRS guidelines for SMEs by Small and
Medium Scale Enterprises in Ikeja, Lagos state.
1.4 RESEARCH
QUESTIONS
The study
will find answers to the following questions:
What is the
level of awareness of IFRS guidelines amongst SME operators in Nigeria?
What extent
is IFRS guidelines adopted by SMEs?
What
challenges do Small and Medium Scale enterprises face in implementing the IFRS
guidelines?
1.5 RESEARCH
HYPOTHESIS
Inorder to
set a good base for carrying out the research, the following hypotheses were
posed, believing that by the time adequate answers have been provided, the
study would have covered necessary grounds. To achieve this, the study seeks to
test the following two (2) operational hypotheses outlined in null form:
Ho: The
level of adoption of IFRS Guidelines by small
scale enterprises is low.
2. Ho: The
implementation of the IFRS does not significantly influence the profitability of small scale
enterprises.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
With a large
percentage of businesses in the state falling within the small scale
enterprises sub-sector, the need to clearly define the scope and area of the
study becomes imperative.
The study is
therefore confined to the small scale enterprises operating in Ikeja Local
Government area of Lagos State, and yet it is easy to use the result of this
research to gain insight into the entire small scale enterprises.
A study of
this nature could not have been carried out without any hitch. Notable among
the constraints was the paucity of relevant empirical literature in the
adoption of IFRS among small scale enterprises. Empirical information on
problems of small scale enterprises are abundant in literature but work done on
their financial literature is still scanty and that was a serious limitation to
the study.
1.7 SIGNIFICANCE OF THE STUDY
Given the
vital role and contribution which small scale businesses in developed and
developing countries make, and considering the ongoing reforms by the Central
Bank of Nigeria for a sustainable financial literacy framework for small and
medium scale enterprises in the country, the significance of this study cannot
be over emphasized.
The
significance of this study therefore lies in the attempt to document the factor
that is truly responsible for hindering the adoption of IFRS amongst small
scale enterprises but which have not been appreciated, recognized or factored
into the various incentives schemes and policy measures being put up for SSEs
in the state and the nation at large.
In addition,
this research will equip owners of small scale enterprises by encouraging them
to give the keeping of proper accounting records a greater priority in the
objectives of their business. With this, adequate information about the
profitability of the business will be accurately known.
Furthermore,
apart from the result of the study contributing to the “knowledge bank” of
small scale enterprises, it will stimulate more researches into this area since
from research literature work in this field is still minimal.
Lastly, it
will be my pre-requisite for the award of Bachelor of Science (B.Sc.) Degree in
Accounting.
1.8 ORGANIZATION OF THE STUDY
This study
is presented in five (5) chapters. These chapters are organized in a sequential
manner that will aid careful investigation and easy achievement of the
objectives.
Chapter one
is a preview of the background of the study and the problem(s) that
necessitated the research. This leads to the outline of the objectives,
significant of the study, research questions and operational hypothesis within
the sample scope of small scale enterprises in Lagos, Nigeria.
Chapter two
presents the review of relevant works as it relates to the study. Also,
theories about the dependent and independent variables were discussed. It also
examines the theoretical framework of the adoption of IFRS and small scale
enterprises.
Chapter
three reveals the methods of data collection in relation to the research
design, population and sample with emphasis on the model specification,
estimation, validation and reliability of research instrument.
Chapter four
presents and analyses the data and also the findings, dealing with the extent
to which small scale enterprises adopt IFRS and its underlining challenges.
Chapter five
summarizes major findings from the study, recommends tentative policy thrust
and also states suggested areas of further research.
1.9 OPERATIONAL DEFINITION OF TERMS
Small Scale
Enterprises: Small scale enterprises can be defined as a business with employment level of not
more than 5 persons and with an annual
turn over of less than Five Hundred
Thousand Naira (N500, 000).
Financial
Literacy: Financial literacy is the ability to understand basic accounting and
finance concepts as well as its
application, the ability to use such knowledge and skills to manage financial resources effectively
for a lifetime of financial well being.
IFRS:
International Fiancial Reporting Standard.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following
instructions and information if you will like to order/buy our complete written
material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount
(#5,000) into our bank Account below, send the following information to
08068231953 or 08168759420
(1) Your project
topics
(2) Email
Address
(3) Payment
Name
(4) Teller Number
We will send your material(s) after
we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
AFFILIATE
Comments
Post a Comment