Abstract:

There have been divergent views on the necessity for regulating financial reporting and with many cases of financial shenanigans in the recent years; the pressure from the public for more stringent rules and regulation became more prominent. Hence, the new legislative initiatives and other reforms came from the demands by the society. In Nigeria, FRCN Act 2011 replaced NASB Act 2003 to address corporate governance weaknesses, particularly in financial reporting and provide opportunity for the adoption of FIRS. Despite the various regulatory initiatives, the managers still play smart in managing earnings to the detriment of other stakeholders. The study investigated the influence of regulatory agencies on creative accounting practices in the pre and post FRCN Act 2011 in Nigeria. The paper covered the six-year period (2005-2011) before FRCN Act and six-year period (2012-2017) after FRCN Act. For the purpose of the study, we employed descriptive and survey research design. Data was collected from the primary source, using structured questionnaire. The study distributed questionnaires to 405 respondents and 241 copies were returned. The pair samples t-test was utilized to test the hypothesis. The results of the study showed that the effectiveness of the regulatory agencies in curtailing creative accounting practices was better in post-FRCN Act than in pre-FRCN Act. The FRCN Act 2011 facilitated the adoption of IFRS, the effect of the adoption is what is reflected in the outcome. The study, therefore, concludes that the enactment of FRCN Act 2011 has significantly improved the effectiveness of regulatory agencies in curtailing creative accounting practices in Nigeria. The study recommends that the regulatory agencies must do more in making sure that companies comply with the relevant legislations and standards, and the FRCN should be proactive in its approach to issues relating to weaknesses in the financial reporting in Nigeria. It is also imperative to consider the review of Companies and Allied Matters Act 2004 with aim of eliminating areas of conflict with IFRS.