Compliance with International Financial Reporting Standards by Listed Companies in Ghana

Abstract

This study examined the extent to which companies listed on the Ghana Stock Exchange (GSE) comply with International Financial Reporting Standards’ (IFRSs) presentation and disclosure requirement. With the aid of a checklist, an index of compliance was devised to quantify the level of compliance. This was applied to the 2010 financial statement of 31 companies listed on the GSE. Descriptive statistics was used to analyse the extent of compliance by companies categorised in line with industry classification of the GSE. The study further examined relationships between company attributes and the extent of compliance. In addition, factors influencing the extent of IFRSs compliance are revealed using correlation and multiple regression analysis. ANOVA was employed to explore statistically significant differences between industry types with regards to their extent of compliance. The findings revealed an overall mean compliance of 85.8% in Ghana. Company attributes of size, profitability, auditor type, internationality and industry type associate positively with IFRSs compliance. ANOVA results revealed differences between industry types with regards to their compliance rate. The study recommends that the Institute of Chartered Accountants Ghana liaise with regulators to organise regular training programmes for companies to provide a practical guide for full compliance since the IFRSs receive continuous amendment.