The Effects of International Financial Reporting Standards (IFRS) Adoption on Audit Fees in Ethiopia - The Case of Commercial Banks

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Addis Ababa University


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.


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


Audit fees, Commercial banks of Ethiopia, IFRS Adoption