FAQ: What Are Some Reasons Why Ethiopia Has Struggled In Its Adoption Of Ifrs?

What are the challenges of implementing IFRS in Ethiopia?

Finally, the result of the study revealed that weak corporate governance, poor quality of education and training, lack of supports from accountancy professional bodies, weak enforcements of regulatory body, inadequacy of transition period, improper planning, non- availability of transparent market information, high

What are the challenges posed by IFRS adoption?

The result shows that Cost of adoption, need for training, complexity of IFRS, Lack of adequate implementation guidance. Increase volatility of earnings, tax driven nature of previous standards, Problem with Fair value use of IFRS was the main challenges of IFRS adoption.

Why countries do not adopt IFRS?

There are many countries that have not implementing IFRS, because they still hold fast to the accounting stan- dards issued by their respective countries [4] on their research said that economic growth and the level of economic openness do not prove to af- fect the likelihood of IFRS adoption in developing countries.

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Does Ethiopia use IFRS?

IFRS Adoption and Implementation At National Level According to Proclamation No. 847/2014 Article 5(1), Ethiopia has adopted International financial Reporting Standards (both full- IFRS and IFRS for SME) for the purpose of preparing financial statements in December, 2014.

What are the benefits and challenges of adopting IFRS to your country?

Gordon (2008) listed the benefits from adaptation of IFRS over the world to include: better financial information for shareholders and regulators, enhanced comparability, improved transparency of results, increased ability to secure cross-border listing, better management of global operations and decreased cost of

What is IFRS implementation?

The implementation of IFRS, a principle-based set of standards, is not just about changing accounting policies. Implementing IFRS has an impact on all aspects of a company, including financial reporting systems, internal controls, taxes, treasury, management compensation, cash management, and legal, among others.

What are the advantages for IFRS *?

1. Advantages of IFRS compared to GAAP reporting standards

  • 1.1 Focus on investors.
  • 1.2 Loss recognition timeliness.
  • 1.3 Comparability.
  • 1.4 Standardization of accounting and financial reporting.
  • 1.5 Improved consistency and transparency of financial reporting.
  • 1.6 Better access to foreign capital markets and investments.

What is the most critical component of successful adoption of IFRS?

They are unanimous that the ethical environment is the most important challenge for the successful adoption of IFRS.

What do you think will be the most challenging obstacle for a company moving to adopt IFRS?

The various problems for the adoption and convergence of IFRS identified include funding for IASB, tax implications, preparedness for the transition to IFRS, compliance issues and enforcement mechanisms, and cultural and structural barriers. Funding of the IASB is one of the biggest obstacles to the adoption of IFRS.

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Is IFRS difficult?

IFRS is not simply about learning to transfer old accounts into the newly acceptable international accounting standards. IFRS is complex and difficult for any accounting professional without IFRS expertise. Moreover, the IFRS guidelines are continuously amended and companies have to follow the amendments.

Which country does not use IFRS?

The U.S., China, Egypt, Bolivia, Guinea-Bissau, Macao and Niger don’t allow their domestic publicly traded companies to use International Financial Reporting Standards.

Is IFRS mandatory?

IFRS Standards are required in more than 140 jurisdictions and permitted in many parts of the world, including South Korea, Brazil, the European Union, India, Hong Kong, Australia, Malaysia, Pakistan, GCC countries, Russia, Chile, Philippines, Kenya, South Africa, Singapore and Turkey.

What are the challenges of IFRS adoption in Nigeria?

Others serious challenges to IFRS adoption include:

  • IASB funding, staffing and governance structure, consistent adoption.
  • Consistent adoption, application and regulatory review.
  • Compliance issues and enforcement mechanisms.
  • Cultural and structural changes in the various institutions in a country.

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