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Why do African countries adopt IFRS? An institutional perspective

Boolaky, Pran ORCID: 0000-0002-1363-5094, Tawiah, Vincent and Teerooven, Soobaroyen ORCID: 0000-0002-3340-1666 (2020) Why do African countries adopt IFRS? An institutional perspective. The International Journal of Accounting, 55 (1). ISSN 1094-4060

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Abstract

We examine the institutional drivers of International Financial Reporting Standards (IFRS) adoption in Africa. The study covers all 54 African countries and relies on data from 2010 to 2015. Our results support the neo-institutional theoretical predictions that coercive, mimetic, and normative isomorphism influence IFRS adoption in Africa, although the circuits of isomorphic pressures differ from previous studies investigating adoption at the worldwide level and in emerging economies. Specifically, we find evidence of the influence by the World Bank and International Monetary Fund on African countries made subject to the Report on Observance of Standards and Codes — Accounting and Auditing program of assessment. We also found that the presence of global audit firms and the years of membership in the International Federation of Accountants are strongly associated with a country’s decision to adopt IFRS. Also, countries with a more structured and active professional accounting organization (PAO) are more likely to adopt IFRS. Our findings provide insights into the significant role played by local PAOs in the promotion of IFRS. Furthermore, we provide empirical evidence that the nature of the isomorphic pressures in Africa is different from those suggested in prior studies, reinforcing the view that IFRS adoption is primarily driven by social and political dimensions, rather than the economic dimension usually professed by IFRS proponents.

Item Type:Article (Published)
Refereed:Yes
Additional Information:Article number: 20500055
Uncontrolled Keywords:Accounting; Africa; IFRS adoption; neo-institutional theory
Subjects:Business > Accounting
DCU Faculties and Centres:DCU Faculties and Schools > DCU Business School
Publisher:World Scientific Publishing
Official URL:https://dx.doi.org/10.1142/S1094406020500055
Copyright Information:© 2020 The Authors. Open Access
ID Code:25916
Deposited On:28 May 2021 10:42 by Vincent Tawiah . Last Modified 28 May 2021 10:42

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