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Why Do African Countries Adopt IFRS? An Institutional Perspective

Boolaky, Pran K and Taiwah, Vincent and Soobaroyen, Teerooven (2020) 'Why Do African Countries Adopt IFRS? An Institutional Perspective.' The International Journal of Accounting, 55 (1). p. 2050005. ISSN 0020-7063

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Abstract

We examine the institutional drivers of International Financial Reporting Standard (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 (WB) and International Monetary Fund (IMF) on African countries made subject to the Report on Observance of Standard and Codes (ROSC) Accounting and Auditing program of assessment. We also found that the presence of global audit firms and the number of years of IFAC membership 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, our study adds to the literature by providing empirical evidence that the nature of the isomorphic pressures in Africa are different from those suggested in prior studies and reinforces the view that IFRS adoption is primarily driven by social and political dimensions rather than the economic ones usually professed by IFRS proponents.

Item Type: Article
Uncontrolled Keywords: Accounting; Africa; IFRS adoption; neo-institutional theory
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Accounting Centre
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 25 Nov 2019 12:56
Last Modified: 06 Jan 2022 14:08
URI: http://repository.essex.ac.uk/id/eprint/26007

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