Earnings Quality of Healthcare Companies in Nigeria Before and After IFRS Adoption

The major objective of this study was to examine the effect of the adoption of IFRS on the reported earnings quality of listed healthcare companies in Nigeria. It was prompted by the adoption of the IFRS where objectives include ensuring a true and fair presentation of financial statements to enable informed decision making. Using a census sampling technique, seven listed healthcare companies were selected for study. It covered a period of 18 years, 2003 to 2020, nine years each of pre and post adoption of IFRS. Earnings quality (EQ), the dependent variable, was measured by using the Gullet, Kilgore and Geddie (2018) model. Secondary data were extracted from published accounts of the companies for the pre and post IFRS adoption period. The results of the analyses showed that mean EQ scores for post IFRS adoption period were greater than that of pre adoption period. Further analyses, using paired sample t test statistics indicated that the difference in mean EQ score was statistically significant. It was therefore concluded that the adoption of IFRS has a positive significant effect on the quality of reported earnings of healthcare sector companies listed in the Nigerian Stock Exchange. It was recommended that the adoption of IFRS be encouraged and diligently enforced by regulators in Nigeria.