Research Article Open Access

Adoption of International Financial Reporting Standard, Capital Structure and Profitability of Listed Firms in Nigeria

Abstract

The extant literature on the relationship between capital structure and profitability of listed firms when their financial statement is prepared as per Nigerian Accounting Standard revealed that a relationship exists between capital structure and profitability of listed firms. Listed firms in Nigeria were mandated to adopt International Financial Reporting Standard (hereafter referred to as IFRS) since the year 2012. Since the year 2012, it is not fully known if the adoption of IFRS affects the relationship between capital structure and profitability of listed firms or it is still the same before the adoption of IFRS. This is a gap which this research study intended to address. This study used multiple regression analysis to find out whether the same relationship exists between capital structure and profitability of listed firms in Nigeria or not when listed firms prepare their financial statement as per IFRS from the adoption of IFRS in 2012 to 2015. This research limits its analysis to the use of data taken from the selected firms’ financial statement for the period under study. This finding shows that the relationship between capital structure and profitability of the firm is the same both before and after the adoption of IFRS. It means adoption of IFRS does not influence the relationship between capital structure and profitability of the firm significantly

Otekunrin Adegbola Olubukola

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