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The International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES)

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  • Francis Aboagye‐Otchere
  • Juliet Agbeibor

Abstract

Purpose - The purpose of this paper is to assess the suitability of the International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES) for small businesses (micro entities and SMEs) in Ghana by assessing their need for the IFRS for SMEs and the appropriateness of the IFRS for SMEs as the accounting standard of choice for small businesses in Ghana. The paper also aims to investigate the firm characteristics likely to influence small businesses' need for the Standard and the appropriateness of the Standard for small businesses. Design/methodology/approach - The survey method was used. A questionnaire survey of 305 small businesses was conducted, from which 149 useable questionnaires were returned. Findings - It was found that small businesses in Ghana have limited international structures and activities which do not result in a need for internationally comparable financial reporting information. Small businesses also do not receive requests to provide such information. In total, 19 of the 27 issues addressed by the Standard and assessed in the study were found to be irrelevant to small businesses in Ghana. Size, legal form and number of owners influence the suitability of the Standard for small businesses in Ghana. Originality/value - The paper provides some of the early empirical evidence on the final version of the IFRS for SMEs in Africa. The study also brings a fresh perspective by applying institutional theory to the adoption and implementation of the IFRS for SMEs.

Suggested Citation

  • Francis Aboagye‐Otchere & Juliet Agbeibor, 2012. "The International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES)," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 10(2), pages 190-214, October.
    • Handle: RePEc:eme:jfrapp:v:10:y:2012:i:2:p:190-214
    DOI: 10.1108/19852511211273723
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    References listed on IDEAS

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    1. Covaleski, Mark A. & Dirsmith, Mark W., 1995. "The preservation and use of public resources: Transforming the immoral into the merely factual," Accounting, Organizations and Society, Elsevier, vol. 20(2-3), pages 147-173.
    2. Akwasi A. Ampofo & Robert J. Sellani, 2005. "Examining the differences between United States Generally Accepted Accounting Principles (U.S. GAAP) and International Accounting Standards (IAS): implications for the harmonization of accounting stan," Accounting Forum, Taylor & Francis Journals, vol. 29(2), pages 219-231, June.
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    Cited by:

    1. Bananuka, Juma & Night, Sadress & Ngoma, Muhammed & Najjemba, Grace Muganga, 2019. "Internet financial reporting adoption: Exploring the influence of board role performance and isomorphic forces," Journal of Economics, Finance and Administrative Science, Universidad ESAN, vol. 24(48), pages 266-287.
    2. Khaldoon Al†Htaybat, 2018. "IFRS Adoption in Emerging Markets: The Case of Jordan," Australian Accounting Review, CPA Australia, vol. 28(1), pages 28-47, March.
    3. Jean Damascene Mvunabandi & Charmaine Lathleiff & Paul-Francois Muzindutsi, 2022. "Financial Accounting as a Tool to Enhance Non-Government Organisations Performance: A Case Study of a Large NGO in Durban, South Africa," International Journal of Economics and Financial Issues, Econjournals, vol. 12(3), pages 10-17, May.
    4. Lawrence Mpele Lekhanya, 2013. "Functions and Reliability of International Financial Reporting Systems of Rural Smes in Kwazulu Natal: Knowledge and Understanding of Financial Management," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(3), pages 125-132, July.
    5. Mallika Devi Pathak & Brajaballav Kar & Madhu Chhanda Panda, 2022. "Chaos and complexity: entrepreneurial planning during pandemic," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 1-11, December.
    6. Mbawuni, Joseph, 2018. "Perceived Benefits and Challeges of IFRS Adoption in Ghana: Views of Members of Institute of Chartered Accountants, Ghana (ICAG)," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 9(1), pages 99-114, January.
    7. Ahmad Saiful Azlin Puteh Salin, 2017. "Malaysian Private Entities Reporting Standards - Benefits and Challenges to SMEs," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(11), pages 1302-1320, November.

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