Empirical Analysis of the impact of IFRS Adoption on the Return on Equity (ROE) and Earnings Per Share (EPS) of Construction Firms Listed on the Nigerian Exchange Group

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Empirical Analysis of the impact of IFRS Adoption on the Return on Equity (ROE) and Earnings Per Share (EPS) of Construction Firms Listed on the Nigerian Exchange Group

Onah, Kelvin Amobi
Department of Accountancy, University of Nigeria, Enugu Campus, Nigeria

Abstract

This study examined the impact of International Financial Reporting Standards (IFRS) adoption on the Return on Equity (ROE) and Earnings per Share (EPS) of construction firms listed on the Nigerian Exchange Group (NGX Group). The specific objectives were to: examine the average Return on Equity (ROE) of construction companies in Nigeria pre and post IFRS adoption; and compare the average Earnings per Share (EPS) of construction companies in Nigeria pre and post IFRS adoption. The study utilized an ex post facto research design, with secondary data sourced from the published annual reports of 8 construction companies. The data covered a period of 18 years, from 2003 to 2020, split into two phases: the pre-IFRS period (2003-2011) and the post-IFRS period (2012-2020). Descriptive and inferential statistical techniques, including paired-sample t-tests, were applied to analyze the data, with hypotheses tested using ANOVA. The findings revealed significant improvements in both ROE and EPS post-IFRS adoption. Specifically, ROE increased from 13.25% in the pre-IFRS period to 18.03% in the post-IFRS period (p < 0.001), while EPS rose from N0.54 to N0.70 (p = 0.012). These results suggest that the adoption of IFRS led to better profitability for shareholders and improved financial performance in terms of earnings per share. The study contributes empirical evidence on the effect of IFRS adoption in Nigeria, providing insights into its impact on the construction industry. It concludes that the implementation of IFRS significantly enhances financial performance, and recommends that construction firms prioritize transparency and adopt best practices to sustain the observed improvements in their financial metrics.

Keywords: IFRS Adoption; Financial Performance; Nigerian Exchange Group; Construction Firms; Earnings Per Share (EPS); Return on Equity (ROE)

IJAFIS 6(1)1-14Download

Cite as:
Onah, K. A.  (2025). Empirical Analysis of the impact of IFRS Adoption on the Return on Equity (ROE) and Earnings Per Share (EPS) of Construction Firms Listed on the Nigerian Exchange Group. International Journal of Accounting, Finance, and Investment Strategies, 6(1), 1-14. https://doi.org/10.5281/zenodo.14869443

© 2025 The Author(s). International Journal of Accounting, Finance, and Investment Strategies published by ACADEMIC INK REVIEW.

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