Abstract
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 locally and due to IFRS implementation costs. Project governance factors were found to contribute significantly for IFRS project success in the firms studied. This was in line with the project management literature that proper project governance will turn even a highly risky project into a success. In addition, there was no statistically significant difference in the IFRS project implementation success of private and public firms. Future research shall consider additional variables that influence IFRS project success and other firms that implemented IFRS in the next years as well as regional level public enterprises. Key words: International financial reporting standards (IFRS), regulatory body, public interest company, project governance, project success.
Highlights
Accounting practice and business operations are highly intertwined as organizations, whatever their form, mobilize scarce resources to realize their strategic objectives and survive for long
As per Mihret et al (2012) and Mihret and Bobe (2014), in a globalized environment, the interactions between nation-states have greatly increased and the diffusion of best accounting practices, including International Financial Reporting Standards (IFRS), has been accomplished through the contribution of international organizations such as the WB and IMF. This asserts that institutional factors significantly influence successful IFRS adoption
Explanatory design would help understand the antecedents of IFRS project implementation success thereby providing relevant recorded information for future implementation success of IFRS, IFRS for SMEs and International Public Sector Accounting Standards (IPSAS)
Summary
Accounting practice and business operations are highly intertwined as organizations, whatever their form, mobilize scarce resources to realize their strategic objectives and survive for long. As per Mihret et al (2012) and Mihret and Bobe (2014), in a globalized environment, the interactions between nation-states have greatly increased and the diffusion of best accounting practices, including IFRS, has been accomplished through the contribution of international organizations such as the WB and IMF This asserts that institutional factors significantly influence successful IFRS adoption. They further argued that among the numerous natural variables (financial, legitimate, social and political), political factor apply the most critical effect on the advancement of accounting practices It can be hypothesized as follows: H1: Institutional pressures influence positively and significantly IFRS project implementation success.
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