TEWODROS BIRHANU2024-04-122024-04-122021-01One of the foremost requirements to operate a Business successfully is to have a good financial reporting system in place. This study assessed implementation of International Financial Reporting Standards (IFRS) In Ethiopia in accordance with financial reporting proclamation # 847/2014. The study assessing the challenges faced in implementing, International Financial Reporting Standards (IFRS) by Ethiopian firms. The study was provides insight into the IFRS implementation process based on a questionnaire that is send to large tax payers business officers and it was indicate: (1) whether the respondents have indicated IFRS Enforcement capacity is a key challenge for transition; (2) whether the process is costly, complex, and burdensome; (3) whether Institutional readiness is require more attention for transition to IFRS; (4) whether the more comprehensive the approach to conversion, the more respondents are tend to agree with the factors influencing the transition; (5) whether the complexity of IFRS as well as the lack of Implementation guidance and uniform interpretation were also key challenges in technical capacity area; the results of the questionnaire and interviews were confirmed the transition to IFRS in Ethiopia was challenging. The study also discusses the prospect of IFRS implementation in Ethiopia and the result is showed that whether or not the transition plan to IFRS and its implications for preparers, users, educators and other stakeholder has to be effectively coordinated and communicated. In the conclusion part, the study brings out the ways through which these challenges can be addressed.enIFRS;Proclamation;ChallengeEnforcement Capacity,Institutional readinessTechnical CapacityThesis