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| IFRS 9 Implementation and Earnings Management by Banks in a Covid-19 Pandemic Era |
Anthony Nzeribe Chizue NWAUBANI(PhD, FCA, ACIB) and Prof. Wilson Uche ANI
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Abstract:
The main purpose of this study is to examine effect of IFRS 9 implementation in Nigeria on earnings management in banks in a COVID-19 pandemic era. Ex-post facto design is employed. The period is 2016 to 2020, categorized into two. Category 1 has 2016-2017 as pre implementation period and 2018-2019 as post era while group 2 has 2016-2017 and 2019-2020. The effect of the implementation without COVID-19 pandemic is examined in group 1 while the effect in a COVID 19 era (2020) is determined in category 2. Outcomes in the two groups are compared to give an estimated effect of the COVID-19. Secondary data from annual reports of the selected banks are analyzed employing paired student t-test model. The selected banks are five out of eight listed banks with international authorization. SPSS(20) and EViews are used. Impairment allowance, impairment charges, ratio of loan loss to total loans and other variables considered to approximate accrual-based earnings management are selected. Findings show that impairment charges are significantly reduced in post implementation periods suggesting significant earnings management. Most of the effect is positive but insignificant. The study recommends among others that CBN and Financial Reporting Council of Nigeria should ensure effective implementation.
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