The Effectiveness of SAS and IFRS Based Financial Reports: Evidence from the Healthcare Sector

Since the adoption of IFRS the world over, many studies have been conducted by researchers on the effectiveness of IFRS compared to local GAAPS. This study adds to the existing literature by investigating the effectiveness of SAS and IFRS based financial reports. The study specifically reviews the financial performance of Health care firms in Nigeria under SAS and IFRS. Financial performance is proxied by return on equity (ROE) as dependant variable while long term solvency ratio represented by debt to equity ratio (DER) and debt to asset ratio (DAR) and investment ratio represented by earnings per share (EPS) and dividend per share (DPS) were used as independent variables with sales as control variable. Data was sourced from the financial statements of the health care firms covering period of 14 years (2005-2018) divided into 7 years each of SAS and IFRS regimes. Result show that SAS was better and more effective in the area of investment ratio compared to IFRS. However, for the long-term solvency, it was mixed result with debt to asset ratio (DAR) better under SAS but debt to equity ratio (DER) more effective under IFRS. Results of SAS and IFRS models were subjected to Akaike’s information criteria and Bayesian information criteria test of comparability which indicate that model SAS was better when compared with IFRS regime. Therefore, based on the findings, the study concluded that the introduction of IFRS has not significantly impacted on the financial performance of firms under health care sector in Nigeria.