Abstract
This study examined the extent to which companies listed on the Ghana Stock Exchange (GSE) comply with International Financial Reporting Standards’ (IFRSs) presentation and disclosure requirement. With the aid of a checklist, an index of compliance was devised to quantify the level of compliance. This was applied to the 2010 financial statement of 31 companies listed on the GSE. Descriptive statistics was used to analyse the extent of compliance by companies categorised in line with industry classification of the GSE. The study further examined relationships between company attributes and the extent of compliance. In addition, factors influencing the extent of IFRSs compliance are revealed using correlation and multiple regression analysis. ANOVA was employed to explore statistically significant differences between industry types with regards to their extent of compliance. The findings revealed an overall mean compliance of 85.8% in Ghana. Company attributes of size, profitability, auditor type, internationality and industry type associate positively with IFRSs compliance. ANOVA results revealed differences between industry types with regards to their compliance rate. The study recommends that the Institute of Chartered Accountants Ghana liaise with regulators to organise regular training programmes for companies to provide a practical guide for full compliance since the IFRSs receive continuous amendment.
Highlights
The fact that users rely on financial statements, especially financial reports from public companies, for economic decisions has called for the establishment of standards to regulate the preparation of such statements to enhance their reliability
The results clearly shows that no company listed on the Ghana Stock Exchange (GSE) fully obtained an overall compliance rate of 100% with all the International Financial Reporting Standards’ (IFRSs) required presentation and disclosures in line with (Tower et al 1999; Street & Bryant, 2000; Glaum & Street, 2003; Ballas & Tzovas, 2010; Al-Shammari, 2011)
The study revealed an overall mean compliance rate of 85.8% with 62.2% and 85.8% being the minimum and maximum scored by a company
Summary
The fact that users rely on financial statements, especially financial reports from public companies, for economic decisions has called for the establishment of standards to regulate the preparation of such statements to enhance their reliability. Accounting standards have been developed by different countries to regulate the accounting systems peculiar to their environment. Businesses have grown and expanded across borders. The capital needs of companies have grown with new capital secured from international markets. Different information needs of users from both domestic and international sources emerged and difficulties of financial statements comparability as a result of different standards emerged. Due to increasing integration of international markets, companies around the world are in need of executing their business in a manner to conform to international corporate activities (Beier, 2008). Tafara (2008) was right in noting that the stakeholders and investors are no longer limited in their selection of companies and investment opportunities to search for the best portfolio
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
