Department of Accounting and Finance

URI for this collectionhttps://rps.wku.edu.et/handle/123456789/45801

Department of Accounting and Finance

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    BENEFITS AND CHALLENGES OF USING INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS): A STUDY ON ETHIOPIAN PUBLIC ENTERPRISES
    (WOLKITE UNIVERSITY, 2020-06) BEKELE JARSA NESHIER, BEKELE
    International Financial Reporting Standards (IFRS) are set of Accounting Standards developed by International Accounting Standard Board (IASB) that is the global standards recognized for thepreparation of companies’ financial statements. This study examines benefits and challenge of implementation of IFRS in Ethiopian public enterprises which establish in accordance with financial reporting proclamation # 847/2014, the study also identifies the factors that facilitate implementation of IFRS in Ethiopian public enterprises. Primary data were collected through five Point Likert-scale questionnaires. The study used non-random sampling of judgmental technique to select 10 enterprises from 22 enterprises based on nearness of the company and time of establishment.SPSS used to analyze a data collected through questionnaire the questionnaire data were analyzed using descriptive statistics, correlations, parameter estimiat and Ordinal Logistic Regression analysis. The findings revealed that IFRSimproves effectiveness of financial reporting, provides greater reporting transparency,it reduce cost of capital, It provides better information for decision making, make confidence for lender,enables better risk management and provides greater creditability.The study also foud that IFRS Implementation have challenges. It is costly, IFRS increases the complexity of financial reporting, Lack of IFRS implementation guidance affects the implementation of IFRS and increases the risk for manipulation in interpretation of financial statements, IFRS increased volatility of earnings, Tax driven nature of previous standards is a challenge for IFRS implementation, lack of proper instructions from regulatory bodies and Problem with IT system. The study also revealed Management support, Institutional readiness, Educational level, and Enforcement capacity significantly affect the quality of IFRS implementation in Ethiopian public enterprises. The findings suggest that a rigorous IFRS capacity building program should be embarked by the government, allregulatory bodies, enterprises and training institutions in order to provide the needed manpower for IFRS implementation.