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IFRS Adoption and Earnings Quality in Sub-Saharan Africa | Abstract
International Journal of Accounting Research

International Journal of Accounting Research
Open Access

ISSN: 2472-114X

+441518081309

Abstract

IFRS Adoption and Earnings Quality in Sub-Saharan Africa

Prince Gyimah

This study perused the correlation between IFRS adoption and earnings quality of listed firms in Sub-Saharan Africa country, Ghana. The study used secondary data collected from sixteen non-financial listed firms over pre-adoption periods of IFRS (2005 and 2006) and immediate post-adoption periods of IFRS (2007 and 2008). The study used logistic regression to examine the impact of pre-and-post adoption of IFRS’s on earnings quality. The results showed that firms managed to manipulate earnings toward a positive target more frequently in the pre-IFRS adoption period than the post-adoption period, and firms recognized large losses more frequently in the post-IFRS adoption period when they occurred as compared to the pre-IFRS adoption period. The study reinforces that adoption of IFRS prevents manipulation of earnings, limits possible flexibilities and accounting choices, and provide clearer rules that signal high quality accounting information and transparency.

Published Date: 2021-02-22; Received Date: 2021-02-01

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