International financial reporting standards adoption and accounting quality: evidence from Ghanaian listed firms

Abstract

The adoption of International Financial Reporting Standards (IFRS) by Ghanaian listed firms form the basis of higher accounting quality and reliability of accounting information from IFRS application. Existing literature suggests that the adoption affects the level of accounting quality.The aim of this paper is to examine whether the shift to IFRS minimizes weaknesses in Ghana National Accounting Standards (GNAS) in measuring accounting quality. The paper employs research design metrics of discretional accruals, accrual quality, earnings smoothness, small loss avoidance and price-earnings to compute accounting quality of Ghana Stock Exchange (GSE) firms. The results suggest that accounting quality has improved after the shift to IFRS. This research fills the gap in Ghana level, given that there was no such study. Also, this study gives evidence of improvement in the information environment of GSE capital market after the shift in terms of information quality and accounting comparability.

International Financial Reporting Standards, Board Governance and Accounting Quality: Preliminary Ghanaian Evidence

“…Several empirical evidences examine the influence of IFRS adoption on the quality of accounting information in Ghana. Employing earnings smoothness, accrual quality, discretional accruals and price earnings, Benjamin Yeboah and Pais (2021) examine the influence of IFRS on accounting quality of firms listed on the Ghana Stock Exchange. They report that there has been a significant impact on accounting quality following the adoption of the IFRS concept in Ghana.…”