Why Do African Countries Adopt IFRS? An Institutional Perspective

Boolaky, P., Tawiah, V. Soobaroyen, T. (2020). The International Journal of Accounting (Online Ready)

53 Pages Posted: 20 May 2020

See all articles by Vincent Tawiah

Vincent Tawiah

Griffith University; University of Mysore - Department of Commerce; University of Cape Coast; Dublin City University Business School

Date Written: April 23, 2020

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 are more likely to adopt IFRS. Our findings provide insights into the significant role played by local professional accounting organizations 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.

Keywords: Accounting; Africa; IFRS adoption; neo-institutional theory

Suggested Citation

Tawiah, Vincent, Why Do African Countries Adopt IFRS? An Institutional Perspective (April 23, 2020). Boolaky, P., Tawiah, V. Soobaroyen, T. (2020). The International Journal of Accounting (Online Ready), Available at SSRN: https://ssrn.com/abstract=3583567

Vincent Tawiah (Contact Author)

Griffith University ( email )

PMB 50
Gold Coast Queensland 9726
Australia

University of Mysore - Department of Commerce ( email )

Mysore
India

University of Cape Coast ( email )

PMB, UCC, GHANA
Department of English
Cape Coast, Central Region
Ghana

HOME PAGE: http://ucc.edu.gh

Dublin City University Business School ( email )

Dublin 9
Ireland

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