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Impact of Adopting IFRS in Ghana: Empirical Evidence

Impact of Adopting IFRS in Ghana: Empirical Evidence

Ben K. Agyei-Mensah
Copyright: © 2016 |Pages: 40
ISBN13: 9781466698765|ISBN10: 1466698764|EISBN13: 9781466698772
DOI: 10.4018/978-1-4666-9876-5.ch010
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MLA

Agyei-Mensah, Ben K. "Impact of Adopting IFRS in Ghana: Empirical Evidence." Economics and Political Implications of International Financial Reporting Standards, edited by Efobi Uchenna, et al., IGI Global, 2016, pp. 191-230. https://doi.org/10.4018/978-1-4666-9876-5.ch010

APA

Agyei-Mensah, B. K. (2016). Impact of Adopting IFRS in Ghana: Empirical Evidence. In E. Uchenna, M. Nnadi, S. Tanna, & F. Iyoha (Eds.), Economics and Political Implications of International Financial Reporting Standards (pp. 191-230). IGI Global. https://doi.org/10.4018/978-1-4666-9876-5.ch010

Chicago

Agyei-Mensah, Ben K. "Impact of Adopting IFRS in Ghana: Empirical Evidence." In Economics and Political Implications of International Financial Reporting Standards, edited by Efobi Uchenna, et al., 191-230. Hershey, PA: IGI Global, 2016. https://doi.org/10.4018/978-1-4666-9876-5.ch010

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Abstract

This chapter reports on the impact of the adoption of IFRS in Ghana. It first traced the history of accounting standards in Ghana and the reason for the adoption of IFRS in 2007. One of the key issues that IFRS talk about is the disclosure of financial and non financial information in corporate financial reports. Hence this chapter provides evidence on the extent of disclosures, the quality of the disclosures and the determinants of the disclosures. The disclosure of financial ratios, forward-looking information and internal control information in corporate annual reports were extensively studied and findings reported in this chapter. The results of the quality of financial information disclosure mean of 76.80% (pre adoption) and 87.09% (post adoption) for the two years indicate that the quality of financial reports has improved significantly after adopting IFRSs. The findings thus confirms that the implementation of IFRSs generally reinforce accounting disclosure quality. However, the low levels of other disclosures (accounting ratio disclosure quality 6.64%, level of disclosure 60%; forward looking information 35%; internal control information 42%) by listed firms in Ghana do not support signaling theory which suggests that firms with good performance will wish to signal their quality to investors, hence are more likely to disclose their performance by disclosing more voluntary information. It is therefore important for the SEC and The Ghana Stock Exchange to do more by enforcing adherence to the corporate code of corporate governance.

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