IFRS and FPI nexus: does the quality of the institutional framework matter for African countries?

Simbi, Chipo; Arendse, J.; Khumalo, Sibanisezwe

doi:10.1108/jaee-10-2021-0319

Cited by 6 publications

(4 citation statements)

References 73 publications

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“…The adoption of International Financial Reporting Standards (IFRS) in African countries has implications for firm value and financial operations (Agyei-Boapeah et al, 2020). Additionally, the quality of institutional frameworks in African countries influences the nexus between IFRS and foreign portfolio investment (FPI), impacting financial operations (Simbi et al, 2022). Furthermore, there is a dynamic relationship between financial inclusion, banking stability, and economic growth in Africa, highlighting the potential for BI tools to revolutionize financial operations (Boachie et al, 2021).…”

Section: Business Intelligence In Africamentioning

confidence: 99%

Business intelligence tools in finance: A review of trends in the USA and Africa

Adetumi Adewumi,

Ese Eigbadon Oshioste,

Onyeka Franca Asuzu

et al. 2024

World J. Adv. Res. Rev.

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This paper provides a comprehensive overview of the current trends in Business Intelligence (BI) tools within the finance sector, with a specific focus on the divergent landscapes of the USA and Africa. As the financial industry evolves, the integration of advanced BI tools has become imperative for informed decision-making and sustainable growth. This review examines key developments, challenges, and opportunities shaping the implementation of BI tools in both regions. In the USA, financial institutions are witnessing a surge in BI tool adoption, driven by the increasing need for real-time data analytics, regulatory compliance, and risk management. The integration of artificial intelligence and machine learning algorithms in BI tools is enabling predictive analytics, empowering financial professionals to make strategic decisions in a rapidly changing market environment. Additionally, the emergence of cloud-based BI solutions is enhancing scalability and accessibility, facilitating seamless collaboration and data-driven insights. Contrastingly, the African financial landscape is experiencing a gradual but promising shift towards BI tool utilization. The continent, characterized by diverse economies and regulatory frameworks, faces unique challenges such as infrastructure limitations and varying levels of technological readiness. However, the potential for BI tools to revolutionize financial operations, improve transparency, and facilitate financial inclusion is evident. Governments and financial institutions are investing in technology infrastructure and skill development to harness the transformative power of BI tools. This review underscores the importance of understanding regional nuances in the adoption of BI tools, recognizing that effective implementation requires tailored strategies. As both the USA and Africa navigate the evolving financial landscape, the convergence of technological advancements and strategic planning will undoubtedly play a pivotal role in shaping the future of BI tools in the finance sector

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Section: Business Intelligence In Africamentioning

confidence: 99%

Business intelligence tools in finance: A review of trends in the USA and Africa

Adetumi Adewumi,

Ese Eigbadon Oshioste,

Onyeka Franca Asuzu

et al. 2024

World J. Adv. Res. Rev.

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“…However, recent studies have a narrower focus. For example, in Table 2, Nnadi and Soobaroyen (2015), Mameche and Masood (2021), Simbi, Arendse, andKhumalo (2023) all investigated the association between the adoption of International Financial Reporting Standards (IFRS) and the level of either FDI or FPI. They all hypothesised that companies' financial statements would become more credible, reliable, transparent, and comparable when a country adopts the IFRS, which will encourage foreign investments.…”

Section: Foreign Investment Risk Indicatorsmentioning

confidence: 99%

A Foreign Investment Destination Risk Framework: Evaluating the Southern African Development Community Member States

Oberholzer,

Buys

2023

Folia Oeconomica

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Potential investment risks need to be understood by an investor organisation, which implies that a host country’s environment plays a significant role in attracting foreign investment. This paper’s purpose was to propose a foreign investment risk conceptual framework to serve as a basis for evaluating the Southern African Development Community (SADC) Member States’ investment risk/attractiveness. Firstly, the most appropriate foreign investment risk indicators from the literature were identified to develop a foreign investment risk framework. Ten recent peer reviewed studies were used to identify the factors which drive investment risk in emerging markets. We developed a conceptual framework including 16 investment risk indicators grouped into four sections: (i) the business environment, (ii) related taxes on business operations, (iii) the economic environment, and (iv) the human and social environments. Secondly, a comparative analysis of the 16 SADC countries was performed, enabling the ranking of the countries in quadrants of investment risk/attractiveness. Data were downloaded from theGlobalEconomy.com (2022) website for six years, from 2015 to 2020. The literature suggests many investment risk indicators which are grouped differently by researchers to form a conceptual framework to evaluate investment risk. This study’s contribution is that the most popular/prevalent risk indicators were identified to develop the new proposed framework. Furthermore, evaluating the SADC region may also serve as an example of investment risk/attractiveness assessment of emerging markets or least developed countries. The practical implication of this paper is that the proposed framework enables transferability since potential investors may connect the fundamentals of this study with their own investigation.

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“…The adoption of international standards is expected to improve financial reporting and is part of an assessment of the quality of a country's institutions. At the same time, some scholars argue that existing institutional structures are crucial for harnessing the full benefits of international accounting standards (Ahmed et al, 2013;Ball, 2016;Simbi et al, 2022). Bova and Pereira (2012) contend that international accounting standards (accrual basis in particular) are less beneficial for countries with weak institutions because of the discretion available in the measurement and reporting of information prepared in accordance with these international standards.…”

Section: Theoretical Underpinnings Prior Research and Hypothesis Deve...mentioning

confidence: 99%

“…From a signalling perspective, IPSAS adoption could act as an indicator for quality financial reporting, particularly in the case of countries with weak institutional structures. So far, there is only evidence from a foreign (private) investment setting, where Simbi et al (2022) found that the positive relationship between IFRS adoption and foreign direct investment in Africa was tempered by the quality of a country's institutional framework.…”

Section: Theoretical Underpinnings Prior Research and Hypothesis Deve...mentioning

confidence: 99%

The relationship between the adoption of international public sector accounting standards and sources of government financing: evidence from developing countries

Tawiah

Soobaroyen

2022

Accounting Forum

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We examine the association between the adoption of International Public Sector Accounting Standards (IPSAS) and the level of government financing in the context of developing countries. We draw upon signalling theory, robust econometric techniques and a sample of 54 developing countries over a 13-year period. Our results show that adopting IPSAS is significantly associated with increased financing from international sources and foreign aid. In contrast, there is no significant association for the case of domestic credit. Our results are more pronounced for developing countries that have adopted accrual-based IPSAS than for those that have adopted cash-based IPSAS. Finally, we find that the association between IPSAS and government financing remains similar regardless of the country's level of institutional quality. Our evidence implies that there is a benefit of increased debt financing after adopting IPSAS, indicative of the incremental signal international capital providers place on the availability of IPSAS-based public sector financial reports.

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IFRS and FPI nexus: does the quality of the institutional framework matter for African countries?

Cited by 6 publications

References 73 publications

Business intelligence tools in finance: A review of trends in the USA and Africa

Business intelligence tools in finance: A review of trends in the USA and Africa

A Foreign Investment Destination Risk Framework: Evaluating the Southern African Development Community Member States

The relationship between the adoption of international public sector accounting standards and sources of government financing: evidence from developing countries

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