Compliance with IFRS (IAS 1) in Sub-Saharan Africa: Comparative study of Ghana and Kenya.
No Thumbnail Available
Date
2016-10
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
KNUST
Abstract
Research conducted on compliance of IFRS since the 1960s used various selected IAS/IFRS. However, it has been identified that the inclusion of International Accounting Standard (IAS) 1, Presentation of Financial Statements, significantly skewed the results obtained because IAS 1 alone has the largest total disclosure requirements. This required that IAS 1 should be studied on its own merit. Studies focusing on IAS 1 was undertaken on listed firms in Ghana in 2012 and 36 listed firms in Bahrain in 2016. No such studies were conducted using a seven-year period, and no such comparative studies of compliance among African countries exists. This research seeks to fill this gab by investigating the level of compliance with IAS 1 disclosure requirements in Sub-Saharan Africa among listed Ghanaian and Kenyan firms. The study also sought to identify the firm characteristics which influence the extent of compliance with IAS 1 by listed firms in Ghana and Kenya. Listed companies sampled for this study were 31 on the Ghana Stock Exchange (GSE) and 47 on the Nairobi Stock Exchange (NSE) using annual reports for a seven-year period of 2008 to 2014. An unweighted IAS 1 disclosure index was utilized in measuring the level of compliance, whereas correlation and multiple regression analysis were employed to identify which specific firm characteristics influence the level of compliance. Findings show a level of 98% and 97% compliance with IAS 1 disclosure requirement of firms on the GSE and NSE respectively. The regression analysis shows this level of compliance with IAS 1 disclosure among Ghanaian and Kenyan firms varies significantly by the type of audit firm and multiple listing status. Type of audit firm (Big 4) is significant and positively related for Ghanaian firms but inversely related for Kenyan firms, whiles multiple
listing status is also significant but inversely related among both GSE and NSE listed firms. Despite the very high level of compliance with IAS 1, educational and regulatory support are necessary in both Ghana and Kenya regarding financial reporting with the establishment of an Authority to enforce complete compliance with accounting standards.
Description
Thesis Submitted To The Department Of Accounting And Finance In Partial Fulfillment Of The Requirement For The Degree Of Mphil. Business Administration (Accounting).