The Effects of International Financial Reporting Standards (IFRS) Adoption on Audit Fees in Ethiopia - The Case of Commercial Banks
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Date
2019-01
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Addis Ababa University
Abstract
The objective of this study is to assess the effects of mandatory adoption of IFRS on the audit
fees of Commercial Banks (CB) in Ethiopia and it utilized correlational research design with
quantitative data collection and analysis on the data gathered from yearly financial audit
reports of the banks during the period of 2014 to 2018. Despite population of the study is
limited to existing CBs, the study employed purposive sampling technique in the selection of
the banks (n = 17) to comply with availability and accessibility of data that excluded the CBE
(the only governmental bank) due to lack of complete data. The data has been analyzed with
descriptive, independent t-test, correlation and panel regression analysis statistical techniques
using STATA and SPSS software packages. Findings of the study showed a significant positive
relationship between IFRS and audit fees which shows that IFRS adoption substantially
increased audit fees among commercial banks operating in Ethiopia. This is attributed to the
general complexity of the IFRS adoption in Ethiopia. The study also finds that banks audited
by the Non-GradeA audit firms experience greater audit fee increase in post IFRS period than
those audited by the GradeA audit firms. However, the study is limited to the Commercial
Banks in Ethiopia, thus, future studies that include several industries might provide better
understanding of the influence of IFRS adoption on audit fees.
Description
Thesis submitted to the Addis Ababa University Department of Accounting and Finance in partial fulfillment of the requirements for the degree of Master of Science in Accounting and Finance
Keywords
Audit fees, Commercial banks of Ethiopia, IFRS Adoption