Implementing international financial reporting standard for small and medium enterprises in Ghana: Problems and prospects

Abstract

SMEs have come to accept the importance of accounting information harmonization in order to remain in today’s business environment. In 2009, the IASB developed and published the IFRS for SMEs in response to the need for a high quality internationally comparable and transparent financial information. In January 2012, the Institute of Chartered Accountants, Ghana directed the use of IFRS for SMEs in Ghana for reporting periods beginning 2013. However, there are widespread reports of non-compliance regarding the 2013 financial reports which resulted in the extension of the compliance period to 2015 by the Institute (ICAG, 2014). The result indicate that Eighty Five (85%) of the sampled entities prepare financial statements. However, most of these financial statements are prepared in compliance with the Ghana National Accounting Standards and others with the full IFRS. The implication of this finding is that, internationally, there is no demand on SMEs to prepare financial reports for international users hence no compliance regarding the directive by ICAG regarding 2015 period.It was recommended that there should be a continuous education, sensitisation, and communication to stakeholders of issues associated with IFRS for SMEs should commence in earnest. Also A rigorous IFRS/IFRS for SMEs capacity building programme should be embarked upon by all regulatory bodies, firms and training institutions in order to provide the needed manpower for the successful implementation of the IFRS for SMEs.