The Challenges of Adoption International Financial Reporting Standards (IFRS) Among Medium Enterprises: The Case of Addis Ababa City Administration
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Date
2021-06
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A.A.U
Abstract
This study examines the challenges of adoption International Financial Reporting Standard
(IFRS) among medium enterprises of Addis Ababa City Administration, Ethiopia. However, the
study raised research question that is, what are the practical challenges face while adopt IFRS
for the selected companies. To answer this research question the study uses survey research
design and adopt the mixed research approach. In addition, the study used multiple data
collection method, including face-to-face interview, questioners and document review. The
questionnaire data were also analyzed using descriptive statistics, data from interview and
document reviews were interpreted qualitatively. Based on the analysis it was found out that
there is a considerable awareness among the medium enterprises that the implementation IFRS
improves the quality of financial reporting, transparency, accountability and economic
efficiency the results also indicated that that medium enterprises in Addis Ababa face
numerous challenges in the process of implementing IFRS include significant cost of adoption
of IFRS, lack of consistent training and awareness about IFRS, lack of readiness to implement
within the time frame set by the board, lack of adequate implementation guidance and lack of
enforcement capacity. The thesis, thus, pointed out practical implications for the government of
Ethiopia and regulatory bodies in setting a firm deadline for the IFRS adoption and in
following the proper application of all the adopted standards. The findings also suggest that a
consistent and well focused IFRS capacity building program should be designed by the
government, all regulatory bodies, firms and training institutions in order to provide the needed
manpower for IFRS implementation.
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Keywords
Medium Enterprises, Challenges of Adoption International