With the adoption of IFRS on January 1, 2012, the publicly listed companies in Nigeria had their existing financial reporting frameworks that were based on Nigerian GAAP (SASs) alternated with the IASB’s new accounting standards. Although the manufacturing sectors of the Nigerian economy had, prior to the adoption, shared in the after-effect of the global economic distress that was chiefly engineered by a series of corporate failures and financial scandals, the advent of the new principle-based international accounting guidelines appears to have successfully re-engaged the interest and confidence of users of financial statements in the stewardship of listed companies in Nigeria. Thus, comparatively deploying and applying the Beneish 8-factored and 5-factored variables within relevant items of the financial reports of 11 selected manufacturing companies in Nigeria for the period 2008-2013, was considered adequate to ascertain the financial reporting quality of the post IFRS published financial statements in comparison with those of the Nigerian GAAP within the weightings of ‘material misstatement’. Although the study found that the 5-factored variables (Beneish 1997 model version) appear to be more effective in predicting genuine existing risks of material misstatement and provide promises for the effective avoidance of the Type II error among users of the two models, the 8-factored variables seem to have revealed more incidence of possible risk of material misstatement among the companies studied.

With the collapse of Enron (USA), WorldCom and Global Crossing (Europe), and the consequent buy up or takeover of some notable Nigerian banks as AfriBank, Oceanic Bank, Intercontinental Bank, Bank PHB, First Inland Bank, etc., the accounting profession came under sharp criticism. With the loss of billions of hard-earned investors’ fund, the public went wild, questioning the competence and integrity of the Nigerian accounting profession, with the existing confidence of users of financial statements in the profession in jeopardy. The financial stamina of nations was lost, and many local stock markets were grossly exposed to the illiquidity storms that followed. Thus, nations that once believed that accounting standards were impermeable suddenly realized the full gains of cross-border listing.

The International Financial Reporting Standard (IFRS) is a global Generally Accepted Accounting Principles (GAAP), setting principles-based and globally accepted Accounting Standards published by the International Accounting Standard Board (IASB) with the core intent of supporting those who adopted it in the preparation and presentation of high quality, transparent and comparable Financial Statements that will aid easy interpretation (Okpala, 2012).

Although there exist beliefs that the advent of IFRS will tighten the doorway of financial manipulations for erring CEOs and management team members, its application in the initial year of adoption (that is 2012 for Nigeria) may further aggravate some sensitive challenges encountered by Auditors during the audit of financial statements based on new sets of accounting frameworks. Lin et al. (2012), however, unanimously agreed with the former, stressing that high quality accounting standards could be effective in minimizing opportunities of earnings manipulation.

Accounting Research and Audit Practices, Nigerian Generally Accepted Accounting Principles (GAAP), Small and Medium Enterprises (SMEs) , Enron (USA), WorldCom and Global Crossing (Europe), Assessing, Risk of Fraud, International Financial Reporting Standard (IFRS) , Nigerian GAAP Financial Reports, Comparative Application, Beneish Models