Relevance of and Compliance with International Financial Reporting Standards to African Countries- Ghana
In order to harmonize accounting practices among countries, the International Accounting Standards Committee
(IASC) had the mandate to formulate, and publish in the public interest accounting standards to be observed in the
presentation of financial statements. However, from 2001, the mantle was handed down to the International Accounting
Standards Board (IASB). Most countries therefore have adopted the International Financial Reporting Standards (IFRS) –
formerly International Accounting Standards (IAS) wholly or in part.
This study seeks to analyze Ghana’s adoption of the International Financial Reporting Standards in the year 2007 and
specifically to ascertain from the professionals in the field the relevance of adopting the IFRS standards in Ghana. Also, the
determinants of the adoption of these standards will be examined. The study also examines the compliance of companies to
the IFRS standards in Ghana. This study employs quantitative research methodology in examining the benefits of adopting
these International Financial Reporting Standards in Ghana.
We find that the professionals in the accounting field in Ghana deem the adoption of these standards to be of immense
benefits especially to the international companies operating in the country and the local companies. It is also relevant in that
it serves to entice investors into the country. We also find that out of the five main determinants of the adoption of IFRS
standards, external influence ranks top, followed by capital market needs, then economic growth. Lowest were legal system
and ineffective previous accounting system. We also find that over sixty (60%) of the twenty companies were fully
complying with IFRS standards.
Keywords - IAS, IASB, IASC, IFRS