Regulatory Effectiveness, IFRS Adoption and Creative Accounting in Nigeria: Evidence from Stakeholder Perceptions

Creative accounting remains a significant threat to the credibility of corporate reporting, investor confidence and the efficient functioning of capital markets, particularly in emerging economies where regulatory capacity and enforcement institutions may be uneven. Focusing on Nigeria, this paper looks at how stakeholders perceive the effectiveness of the country's regulatory framework in curbing creative accounting, paying particular attention to regulatory enforcement, IFRS adoption and institutional enforcement challenges. A cross-sectional quantitative survey was used, drawing on a purposive sample of accessible senior stakeholders, a choice made necessary by resource constraints and restricted access to regulatory-body personnel. Data were obtained through a structured five-point Likert-scale questionnaire, with 70 usable responses from stakeholders involved in financial reporting and regulatory processes. Respondents' perceptions are summarised using descriptive statistics, mainly percentage response distributions across Likert categories; because the underlying item-level data could not be recovered for retrospective validation, no inferential statistical test of association was performed, so the findings below are descriptive accounts of stakeholder perception rather than statistically tested hypotheses. What emerges is a strong stakeholder perception that Nigeria's regulatory framework helps detect and prevent creative accounting, and that IFRS adoption has improved reporting transparency, alongside a clear sense that enforcement constraints, inadequate capacity, regulatory loopholes, limited resources and weak deterrent sanctions, remain significant. This is broadly consistent with recent Nigerian evidence that IFRS adoption and governance mechanisms can reduce some forms of earnings management, even though the effect is not uniform across firms and reporting practices. The paper's central argument is that regulatory effectiveness rests less on the existence of accounting standards than on the institutional capacity to enforce them, which speaks to institutional and deterrence perspectives by showing how enforcement capability turns formal accounting rules into credible behavioural constraints.

Creative accounting; regulatory effectiveness; IFRS; institutional theory

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