Abstract

In Nigeria, the Statement of Accounting Standards (SAS), Companies and Allied Matters Act (CAMA) and the
Central Bank of Nigeria’s directives and regulations provide guidelines to banks in preparation and presentation
of records of financial transactions. In recent time, some Nigerian banks appear to be engaging in
non-standardized and unprofessional practices, which could lead to distress and liquidation. The objective of this
study therefore was to investigate the relationship between level of compliance with Statement of Accounting
Standards and performance of Nigerian banks. Twenty selected banks quoted on the Nigerian Stock Exchange
formed the target sample and these were banks whose Annual Financial Reports for the period of study were
fully available. Both primary and secondary sources of data were employed in carrying out the study. A
researcher-designed questionnaire was used to obtain data from Senior and Managerial staff of each of the banks.
The instrument was structured to accommodate the sixteen Statements of Accounting Standards which are
related to banks and used in the assessment of banks’ compliance. Five hundred questionnaires were
administered to the Senior and Managerial staff of the selected quoted banks. The Annual Financial Reports of
the selected banks from 2005-2009 (post-consolidation era) were also used. The collected data were analyzed
using CAMEL Ratios, and Pearson correlation analysis. The findings of the study indicated a significant positive
relationship between level of compliance with SAS and banks’ performance. In line with the findings, it was
recommended that the Nigerian Accounting Standards Board (NASB) should ensure effective monitoring of
banks in order to enforce compliance, especially among banks that are performing below standard. The need to
adopt International Accounting Standard practice among Nigerian banks was also emphasized.

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