Assessment of International Financial Reporting Standard Adoption and Financial Reporting Quality: Evidence from Ethiopian Commercial Banks
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Date
2020-01
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Publisher
A.A.U
Abstract
This study intends to assess the International Financial Reporting Standard (IFRS) adoption
and quality of financial reporting (Relevance, Understandability, Comparability, and Faith
Representation) in Ethiopian commercial banks. Accordingly, the study used primary data
collected through the questionnaire as the main data collection instrument. Using a
purposive sampling method, the study selected a sample of seven (7) commercial banks from
a total population of eighteen (18) commercial banks to conduct a study for the pre and post
of IFRS adoption with a total of 160 respondents. To achieves the objectives, the study
adopted the qualitative research approach. The primary data were analyzed using descriptive
statistics and secondary data from document reviews were interpreted qualitatively. The
study used the perceptions of preparers of financial reports (accounting & finance officer,
finance managers as well as IFRS implementation team members) in Ethiopian commercial
banks to analyze about IFRS adoption and FRQ in commercial banks. The study adopted a
qualitative research approach and descriptive research design. The results descriptive
analysis shows that; the quality of financial reports which is measured through quality
information (relevance, understandability, comparability and faith representation) was
improved in Ethiopian commercial banks after the adoption of international financial
reporting standards. however, Faithfull representation is not that much happened because of
the adoption of international financial reporting standards.
Besides, the results of the analysis indicate that positive accounting theory is the relevant
theory in the Ethiopian banking industry, whereas there is little evidence to support the
normative accounting theory. Therefore, banks should consider relevance, comparability,
understandability and faith representation to have better financial reports.
Description
A Thesis Submitted to The Department of Accounting and Finance
College of Business and Economics
In Partial Fulfillment of the Requirements for the Degree of Master of
Science in Accounting and Finance
Keywords
IFRS adoption, financial reporting quality, comparability, faith representation, Commercial bank, Ethiopia, Relevance