Sample Selection

The target population is listed and non-listed companies eligible to adopt IFRS for publicly accountable companies. The criteria to decide a company are defined in the FRC roadmap for IFRS adoption as discussed in Chapter 2 and Ayuba (2012). The names of listed companies were obtained from NSE. In addition, the names and contact details of non-listed companies were obtained from the Directorate of Accounting Standards Private Sector at the FRC Head Office in

Ikeja, Lagos, Nigeria. However, the companies’ information from FRC consists of active and inactive

companies making it impossible to know the exact number of active companies required to adopt IFRS.

The study randomly selected companies in Lagos, Abuja and Benin city as the sampling frame. The majority of the companies in Nigeria are concentrated in these cities and usually have branches or subsidiaries in other locations in Nigeria. In addition, the large number of companies in these cities also made it less difficult to approach target respondents. Since the questionnaire requires knowledge of the respondents about their IFRS adoption status and challenges in the adoption,

companies’ CFOs or senior accountants were asked to fill in the questionnaire. Further, companies’

CFOs and Senior Accountants have a significant role in making major accounting decisions such as adoption of IFRS according to the Companies and Allied Matters Act 2004 discussed in Chapter 2.

Taking into account the limitation of time and budget and practical difficulties in obtaining the list and information of the targeted population for non-listed companies, the research used convenience sampling to select sampling units within the information obtained from FRC. The results of the survey, therefore, cannot be interpreted beyond the sample (Zikmund, Carr, & Griffin, 2012). However, anticipating the sampling error that might arise due to the convenience sampling method, the study spread the questionnaires over all districts in Lagos, Abuja and Benin City. Specifically, no more than five companies were selected on the same street and if more than one

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company was contacted on the same street, they must be operating in different business activities and industry.

4.1.3.Sample Size

The sample size was determined by the formula of Cochran (1963). This is used in most primary data collection, as follows:

2 2 o

z pq

n

e



This study chose the level of confidence at 95% (or ±5% precision) and assumed p = 0.5, q = 0.5. Therefore, according to the above formula, a total number of the sample size should be at least 385 observations. Thus, a minimum of 800 companies was contacted in order to obtain enough usable responses for the research.

4.1.4.Survey Instruments

A structured questionnaire was developed to obtain the data for analysis. The questionnaire was then sent to Lincoln University Human Ethics Committee for approval prior to data collection.

4.1.5.Survey Format

The structured questionnaire comprised the following information:

(1) Companies’ general knowledge about IFRS adoption, their knowledge about why IFRS was implemented in Nigeria and question on cultural factors

(2) Companies’ IFRS adoption status, some motivations for IFRS adoption and awareness about perceived benefits in IFRS adoption.

(3) The practical difficulties companies experience in IFRS adoption, and no is sample size

z2 _{is the abscissa of the normal curve that cuts off an area at the tails}

e is the desired level of precision

p is the estimated proportion of an attribute that is present in the population q is 1-p

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(4) Characteristics of the companies including the type of industry in which they operate business activities

(5) Characteristics of the respondents who completed the questionnaire

Section 1 of the survey instrument asked questions on general information about IFRS adoption such as IFRS adoption awareness and perceptions of accounting regulations in Nigeria. Respondents were asked if accounting regulations were important to them and how IFRS supplanted SAS if accounting regulations are important. In addition, the section asked whether or not the respondent completing the question met the criteria for companies required to adopt IFRS as stipulated by FRC. Following that, questions related to accounting value which is used to measure cultural factors were presented to the respondents. Section 1 uses a nominal, categorical and Likert scale of 1 to 5 questions. Further, Section 1 questions address the respondents’

perceived accounting values based on the company’s current accounting practices. These questions address the influences of cultural factors on the company’s likelihood of adopting IFRS.

Section 2 consists of questions that focus on whether the company has adopted IFRS. The questions include some motivational and demotivation reasons for IFRS adoption. Section 3 consists of a series of questions directed towards companies that have adopted IFRS. The questions include practical difficulties companies faced during IFRS adoption. There are questions related to accounting value measurement, internal control systems, availability of market data for calculating accounting values, issues in management accounting systems, the cost of IFRS adoption,

stakeholders’ reactions, IFRS policies and staff knowledge.

Section 4 targets companies that have not adopted IFRS and include issues they experienced if they attempted to adopt IFRS or issues they are likely to face if they choose to adopt IFRS. The section asked the respondents of the likelihood that the companies would adopt IFRS in the future and how soon the companies would adopt IFRS. Issues related to practical difficulties faced by the companies or likely to occur during IFRS adoption are addressed in this section.

Finally, Section 5 addresses the variability of companies’ IFRS adoption based on their industry type and characteristics. Section 5 surveys the characteristics of the companies, including years of establishment, ownership type, industry type, listing status, the number of shareholders,

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international trade status, audit type, company size, respondents’ age group, educational background of the respondent and job title.

4.1.6.Pilot Test

The design of the questionnaire was based on the relevant literature on IFRS adoption. Pretesting of the questionnaire was conducted on a random sample of 20 listed and non-listed companies’

CFOs and senior accountants in Lagos, Nigeria. The pre-test was conducted to obtain feedback to improve the content of the questions, instructions, clarity, and the layout of the questionnaire. Furthermore, pretesting of the questionnaire also assessed the reliability of the constructs, the measures, and the likely response rate. After pilot testing, the questionnaire was then revised to address comments and suggestions of selected respondents. The final version of the questionnaire is attached in Appendix C.

4.2.

Data Analysis

The sets of variables identified from previous studies, media reports and archives related to IFRS adoption were included in the survey questionnaire using Likert scale measurement, multiple choice questions, nominal questions and dichotomous questions. The analysis includes descriptive statistics, factor analysis and test of the hypotheses.

4.2.1.Descriptive Statistics

The profiles of the companies in the survey were identified based on the descriptive analysis. Frequency, Pearson Chi-square distribution and independent sample t-test were used to describe

the companies’ responses to the survey. Likert scales of 1 to 5, multiple choice questions, nominal questions and dichotomous questions were used to measure accounting values, challenges and

companies’ characteristics. This data collection method has been used in previous studies in order to identify the cultural dimensions of companies in Hofstede (2001) and other social science research (Smart, 2012; Sriwaranun, 2011).