Determinants of IFRS compliance in Africa: analysis of stakeholder attributes
Tawiah, Vincent and Boolaky, PranORCID: 0000-0002-1363-5094
(2019)
Determinants of IFRS compliance in Africa: analysis of stakeholder attributes.
International Journal of Accounting & Information Management, 27
(4).
pp. 573-599.
ISSN 1834-7649
Purpose: This paper examines the drivers of companies’ compliance with IFRS using the
stakeholder salience theory.
Research Methods: We have used panel data from 205 companies to examine the IFRS
compliance level across 13 African countries. Our study has also established the relationship
between stakeholders’ attributes and firms’ compliance with IFRS.
Findings: On IFRS compliance, we found that the average compliance score among the
companies over the period was 73.09% with a minimum score of 62.86% and maximum of
85.61%. We found a significant positive association between audit committee competence
(ACC) and compliance and found the same for chartered accountants on board (AOB). There
is less compliance with the latest standards, such as IFRS 3, 7, and 13. Also, IAS 17, 19, 36,
and 37 are problematic across the sample. We also found that compliance has been increasing
over the years.
Practical implications. For companies, our studies provide empirical evidence on the
importance of having chartered accountants’ corporate boards as well as competent audit
committees involved in ensuring high compliance with IFRS. Our findings also provide
valuable information for professional accounting organizations on the role of its members
(chartered accountants) in the effectiveness of IFRS compliance.
Value/Contribution: This study complements and updates prior studies on IFRS compliance
with findings from Africa, a region that has been neglected in the literature.
It provides empirical evidence on the importance of chartered accountants sitting on corporate
boards in ensuring high compliance with IFRS.