The Effects of IFRS Implementation on Tax Evasion Minimization of Listed Multinational Companies in Nigeria: The Moderating Role of Inflation
Abstract
This study investigated how International Financial Reporting Standards (IFRS) implementation operationalized through disclosure comprehensiveness and timeliness of financial reporting relates to tax evasion minimization and earnings management with the moderating variable of inflation among 10 Nigerian multinational firms listed on the Nigerian Exchange Group over the period 2015-2024. The study employed an ex-post facto design and random-effects panel regression with panel-corrected standard errors, we model Effective Tax Rate (ETR) and Discretionary Accruals (DA) as functions of disclosure (DC), timeliness (TFR), inflation (I), and their moderation. Results revealed that greater disclosure comprehensiveness is significantly associated with lower ETR (?=-2.32 p<0.05) while timeliness and inflation exhibit no independent or moderating effects on tax rates. In the earnings-management model, both DC (?=+3.89, p<0.00I) and TFR (?=+0.2I, p< 0.001) positively predict DA, with inflation further amplifying accrual manipulation (?=+1.78, p<0.05). However, the DC*I moderation (?=-0.20 p<0.0I) indicates that high-inflation periods temper the disclosure-DA linkage. These findings suggested that, in the Nigerian context, detailed IFRS disclosures may facilitate complex yet lawful tax strategies and accrual management, particularly when macroeconomic volatility is low. We recommended enhanced regulatory scrutiny of IFRS disclosures and strengthened board/audit-committee oversight during inflationary cycles to curb opportunistic reporting behaviors.
