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The three pillars of institutional theory and IFRS implementation in Nigeria

The three pillars of institutional theory and IFRS implementation in Nigeria This study explores the effects of the three pillars of institutional theory in shaping the activities of institutional entrepreneurs and other social actors during International Financial Reporting Standards (IFRS) implementation in Nigeria.Design/methodology/approachThis study uses a document analysis method to achieve the objectives of the study.FindingsThis study finds that IFRS implementation in Nigeria witnessed some progression from regulative to normative to cognitive pillar building. The regulation on IFRS implementation was initiated top-down rather than through lobbying from professional accounting bodies and the public. Changes in the regulatory framework brought some improvement to corporate financial reporting practices such as the timing of corporate filings of audited financial reports. However, the implementation process is laden with conflicts and power struggle among institutional actors. These conflicts and power struggles led the President of Nigeria to sack the Board of the Financial Reporting Council of Nigeria (FRC), the reconstitution of the Board and appointment of a Chairman for the Board of the FRC.Practical implicationsIFRS implementation process resulted in power redistribution among institutional actors, which led to resistance, tensions and conflicts among institutional actors. The conflicts arise from the need of actors to legitimate their activities and secure their positions. The three institutional pillars are key components of a change process and the actor's social position affects their capability to act as an institutional entrepreneur.Originality/valueThis finding should provide foundational knowledge that will inform practitioners, researchers and regulators in developing countries on how institutional actors shape the approach to corporate reporting regulations. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting in Emerging Economies Emerald Publishing

The three pillars of institutional theory and IFRS implementation in Nigeria

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2042-1168
DOI
10.1108/jaee-07-2019-0139
Publisher site
See Article on Publisher Site

Abstract

This study explores the effects of the three pillars of institutional theory in shaping the activities of institutional entrepreneurs and other social actors during International Financial Reporting Standards (IFRS) implementation in Nigeria.Design/methodology/approachThis study uses a document analysis method to achieve the objectives of the study.FindingsThis study finds that IFRS implementation in Nigeria witnessed some progression from regulative to normative to cognitive pillar building. The regulation on IFRS implementation was initiated top-down rather than through lobbying from professional accounting bodies and the public. Changes in the regulatory framework brought some improvement to corporate financial reporting practices such as the timing of corporate filings of audited financial reports. However, the implementation process is laden with conflicts and power struggle among institutional actors. These conflicts and power struggles led the President of Nigeria to sack the Board of the Financial Reporting Council of Nigeria (FRC), the reconstitution of the Board and appointment of a Chairman for the Board of the FRC.Practical implicationsIFRS implementation process resulted in power redistribution among institutional actors, which led to resistance, tensions and conflicts among institutional actors. The conflicts arise from the need of actors to legitimate their activities and secure their positions. The three institutional pillars are key components of a change process and the actor's social position affects their capability to act as an institutional entrepreneur.Originality/valueThis finding should provide foundational knowledge that will inform practitioners, researchers and regulators in developing countries on how institutional actors shape the approach to corporate reporting regulations.

Journal

Journal of Accounting in Emerging EconomiesEmerald Publishing

Published: Aug 26, 2020

Keywords: Institutional theory; Institutional entrepreneurs; IFRS implementation; Regulatory change; Institutional actors; Legitimacy; Nigeria

References