Benefits and Challenges of International Financial Reporting Standard (IFRS) Transition in Ethiopia (Case Study on Some Selected Organizations in Ethiopia (original) (raw)
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Ethiopia: Benefits and Key Challenges Fikru Fantahun Addis Ababa University, 2012 This study aims to examine the adoption of International Financial Reporting Standards (IFRS) in Ethiopia. The study focuses on examining the benefits and challenges of IFRS including the factors that could influence its adoption. To answer research questions and test the hypotheses the study adopted the mixed research approach. The questionnaire data were analyzed using descriptive statistics, correlations, and multiple linear regression analysis and data from interview and document reviews were interpreted qualitatively. The results show that IFRS adoption in Ethiopia will result in a number of important benefits to a wide range of stakeholders. High cost of adopting, the complex nature, lack of proper instructions from regulatory bodies for implementing IFRS, as well as IFRS's emphasis on fair value accounting, are listed among the most important challenges of IFRS adoption. The study also find that with the exception of government policy the other four variables which are professional bodies, capital market, educational level and company size significantly influence the adoption of IFRS in Ethiopia. Finally, the thesis displayed practical implications for the government of Ethiopia and regulatory bodies in setting a firm deadline for the IFRS adoption and in following the proper application of all the adopted standards. The findings also suggest that a rigorous IFRS capacity building program should be embarked by the government, all regulatory bodies, firms and training institutions in order to provide the needed manpower for IFRS implementation.
Does IFRS Adoption Improve Financial Reporting Quality? Evidence from Commercial Banks of Ethiopia
Research Journal of Finance and Accounting, 2020
The main purpose of this study is to analyze International Financial Reporting Standard (IFRS) adoption and quality of financial reporting by commercial banks in Ethiopia using qualitative characteristics of accounting information such as: Relevance, Understandability, Comparability, and Faith Representation. The study used the perceptions of preparers of banks financial reports (accounting & finance officer, finance managers as well as IFRS implementation team members) to analyze about IFRS adoption in commercial banks. The study adopted mixed research approach and descriptive research design. More specifically, the study used purposive sampling technique to collect a data; the data was collected through primary and secondary source of data. The primary data was collected through questionnaire and secondary data was from different source of documents. The data was analyzed using descriptive statistics. The finding of the study reveals that; the quality of financial report which is measured through (relevance, understandability, comparability and faith representation) was improved after adoption of international financial reporting standards.
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International Financial Reporting Standards (IFRSs) have been adopted by more than 200 countries across the globe. The main objective of IFRSs is to enhance comparable, transparent and accountable financial information for users. However, its adoption and implementation bring opportunities and pose challenges to the adopter(s). The objective of this study is to assess key challenges of IFRS adoption in public utility enterprises in Ethiopia. A descriptive survey design is used for this study. The target population of the study was the three public utility enterprises which are Ethiopian power utility, Ethio-telecom and Addis Ababa water and sewerage authority as target population for this study. But the Addis Ababa water and sewerage authority are yet to start conversion to IFRS. Due to this excluded from target population. 36 respondents from IFRS project team members and finance staffs of the enterprises who were fully engaged in IFRS adoption and who have IFRS knowledge were selected using purposive sampling. Primary data were collected through questionnaire while secondary data were collected through documentary evidence and primary data is analyzed by using different descriptive statistical tools. Finally, the result of the study revealed that cost of IFRS implementation, system incompatibility and support from regulatory body and professional association, nature of IFRS requirement, weak institutional level support, knowledge gap and Poor project management were key challenges that hinder the adoption of IFRS in public utility enterprises. And recommend on importance of strong professional accountancy body that can have a professional membership with IFAC, collaboration and coordination of AABE with different stakeholders.
Adoption of International Financial Reporting Standards (IFRS) in Ethiopia: Empirical Evidence
2015
The purpose of this study is to assess the adoption of international financial reporting standards (IFRS) in Ethiopia: the benefits, challenges and critical factors affecting its adoption. The primary data was collected using questionnaire while the secondary data were collected from journal articles, manuals, books and websites then the collected data are analyzed using multiple linear regression analysis then presented using tables, graphs, charts and descriptive statistics. The study found that Adoption of IFRS by Ethiopia would improve the quality of accounting so as to make judgemented decision among users of accounting information. However, Lack of proper financial reporting guidance, Lack of proper instructions from regulatory bodies, additional training for professionals and modernized IT system in handling the transitions to IFRS are the main challenges of IFRS adoption. This study employed the mix of theory of planned behavior (TPB) and Choi and Meek’s (CM) frame work and ...
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Drawing on Institutional and Economic Network Theories, this study investigated factors influencing International Financial Reporting Standards (IFRS) implementation success in Ethiopian business organizations identified as Public Interest Companies by the government which were expected to adopt IFRS for the year ending June 30, 2018. The study adopted explanatory method to answer the research questions and test hypotheses stated. Data were collected from 123 respondents in 22 first time IFRS adopting business organizations using questionnaires. The findings of the study revealed that economic factors, project governance factors and cultural factors were found to influence project success at 5% level of significance whereas influence of institutional pressures was accepted at 10% level of significance (sig=0.055, closer to 5% of course). Contrary to the literature, economic factors were not positively correlated to IFRS project success as the firms were predominantly operating local...
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The study looked at the issues of IFRS's adoption in Nigeria, and its challenges. It also examined the attendant benefits of IFRS in term of high quality, transparent, reliable and comparable financial statement and how it will be of help to Nigeria financial reporting practice. The sample size which comprises of preparers and users of financial statements from reputable quoted public companies and big four accounting firms in Nigeria (i.e KPMG, Akintola William Deloitte, Pricewaterhousecoopers, and Enrst and Young) was drawn from the entire population which comprises of public companies, financial institutions, players in the capital market, government, e.t.c.. Lagos State, the southwest Nigeria, was also picked as the sampling area because this state has the highest concentration of the study's sample size. Descriptive Statistics were used to analyse data collected from both primary and secondary sources. 100 questionnaires containing 28 relevant questions relating to IFRS adoption in Nigeria, its benefits and challenges, were used to collect data from respondents from both users and preparers of financial statement perspectives. However, after the analysis of the data that was empirically gathered, the findings of this study revealed that full disclosure requirements of IFRS and its emphasis on fair value accounting for the measurement of some items of financial statements (e.g item of property, plant and equipments) will lead to high quality, transparent, and reliable financial statements. The findings also concluded that elimination of reporting language barriers will encourage cross border investment and thus more inflows of foreign direct investments.
Adoption of International Financial Reporting Standard and Financial Reporting Quality
adoption of International Financial Reporting Standard (IFRS) and quality of financial reporting (Relevance, Understandability, Comparability, and Faith Representation) in commercial banks Ethiopian. , 2021
This study intends to assess the adoption of International Financial Reporting Standard (IFRS) and quality of financial reporting (Relevance, Understandability, Comparability, and Faith Representation) in commercial banks Ethiopian. Accordingly, the study used primary data collected through the questionnaire as the main data collection instrument. Using a purposive
This paper presents the findings of an empirical study on the benefits, prospects and challenges of adoption of International Financial Reporting Standards (IFRS) in some African countries. A questionnaire was administered to gather data from respondents made up of users and preparers of accounting information using the Twitter social network. The objective was to find out the perception of users and preparers about what the benefits, prospects and challenges of IFRS adoption are in African countries. The results of the study indicate that IFRS adoption in Africa will have the potential to be beneficial to a wide range of stakeholders. The benefits notwithstanding, there are however, a number of challenges to be faced in the process of adoption of the new standard including the ethical environment in Africa. The study recommends among others that a rigorous IFRS capacity building programme should be embarked upon by all regulatory bodies, firms and training institutions in order to provide the needed manpower for IFRS implementation, monitoring and compliance.
European Journal of Business and Management, 2013
Drawing on extant literature in accounting and financial economics, this study sought to analyze the economic consequences of the adoption of International Financial Reporting Standards (IFRS) by Nigeria through an examination of the major obstacles, benefits and attitudes towards its adoption. As an exploratory study, we drew a sample from the population of Nigerian academics and practitioners who are familiar with the phenomenon of interest. We examined three research questions on the perceptions of Nigerian academics and practitioners about IFRS adoption in Nigeria. The hypotheses were tested using frequency analysis, descriptive statistics, Kruskal-Wallis (K-W) and Chi-square tests. Our findings identified (i) lack of education, understanding and experience by preparers of financial reports with the use of IFRS; and (ii) lack of coverage of IFRS in financial accounting/auditing textbooks as the major obstacles towards its adoption in Nigeria. The results further revealed that: (1) effective IFRS adoption would be valuable to preparers, users, auditors, analysts, and standard setters; and (2) a proper plan to convert all Nigerian companies to IFRS would require training for management, auditors, and investors, along with the pipeline incorporation of IFRS education into accounting curriculum. The policy implication of the study’s findings is the urgent need to integrate IFRS into the accounting curriculum in Nigeria’s higher education system. It also calls for financial regulators and professional accountancy bodies to update their IFRS knowledge in order to maintain their professional competence. Keywords: Accounting Standards, International Financial Reporting Standards (IFRS), Economic Consequences, Developing Country, Politics, Lobbying, Nigeria.
The American Journal of Interdisciplinary Innovations and Research, 2021
This article highlights the importance of IFRSs in developing countries, including Uzbekistan , based on the urgency of the transition to International Financial Reporting Standards (IFRSs) , and the factors that determine its necessity and potential. The most important one of the possibilities, the companies x International stock markets , currency exchange, capital markets and other markets in the world for the International Financial Reporting Standards , or GAAP financial reporting, and to provide in that country. The research work of the transition to IFRS to ensure the quality of the work must be done , the application of IFRS for the first time or before the transformation of the financial report based on national standards, environmental conditions, and production of composition and its contents were revealed .