FACTORS INFLUENCING INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS) ADOPTION IN SELECTED FOOD AND BEVERAGE MANUFACTURING FIRM IN NIGERIA

Abstract

This study examined the factors influencing the adoption of International Financial Reporting Standards (IFRS) among selected food and beverage manufacturing firms in Nigeria. Using Principal Component Analysis (PCA), the study extracted four major components that collectively explained 91.85% of the total variance in IFRS adoption determinants. The first principal component (PC1), which accounted for 44.96% of the variance, was strongly associated with Dividend Per Share (DPS) and Book Value Per Share (BVPS), indicating that firms with higher dividend policies and stronger asset bases are more inclined toward IFRS compliance. The second component (PC2), explaining 25.36% of the variance, was largely influenced by Board Size (BS) and Earnings Per Share (EPS), suggesting that governance structure and profitability play key roles in IFRS adoption decisions. The third and fourth components captured residual variations related to firm-specific reporting characteristics. Overall, the findings imply that financial performance indicators, board composition, and corporate value significantly determine the level of IFRS implementation in Nigeria’s food and beverage sector. The study provides valuable insight for regulators, policymakers, and corporate managers seeking to enhance financial transparency and harmonization within the industry.