The effects of IFRS adoption and Big 4 audit firms on audit and non-audit fees: Evidence from Ghana

Musah, Alhassan; Anokye, Fred Kwasi; Gakpetor, Erasmus Dodzi

doi:10.24818/jamis.2018.03002

Cited by 13 publications

(22 citation statements)

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“…Verifiability is the extent to which the financial report is verifiable by a professional auditor. Since auditing affects FRQ (Coffie et al, 2018;Musah et al, 2018) an unqualified professional auditor"s report adds credibility value to financial reporting information by providing reasonable assurance about the degree to which the annual report represents economic phenomena faithfully (Willekens, 2008;Coffie et al, 2018;Musah et al, 2018).…”

Section: Faithful Representationmentioning

confidence: 99%

“…They also found that the relatively high-quality earnings and low incidence of tax avoidance among firms in Ghana is attributed to the adoption of IFRS and the interaction of firm size to equity capital and the strategy of firms in Ghana to finance their operations with debt. Musah et al (2018) examined the effects of IFRS adoption and the Big 4 audit firms on audit and non-audit fees in Ghana. Using a sample of financial and non-financial firms in Ghana, the results showed that IFRS adoption has a positive and significant relationship with audit and non-audit fees post IFRS adoption.…”

Section: Adoption Ifrs In Ghanamentioning

confidence: 99%

“…They should also include comprehensive glossary, ratios, index, graphical and tabular displays to clarify information, include information on adjustment in past accounting figures for future decisions, and endeavor to make useful comparison of the current and previous accounting periods with the company and with those of other firms. Moreover, since auditing quality affects FRQ (Coffie et al, 2018;Musah et al, 2018), management should work harder to ensure that their financial reports are audited early enough to avoid long delays in auditing of the financial reports and to improve upon the timeliness quality of the reports for useful stakeholder decisions (Puasa et al, 2014).…”

Section: Practical Implicationsmentioning

confidence: 99%

“…In African countries that have adopted IFRS like Ghana, in spite of increasing research in the area of IFRS adoption and its attendant influence on FRQ, empirical research on FRQ of published annual reports of listed companies is very limited. In this regard, there has been research in African countries focusing on IFRS compliance and disclosures (Odia & Ogiedu, 2013;Zakari, 2014;Aboagye-Otchere & Agbeibor, 2012;Agyei-Mensah, 2012;Agyei-Mensah, 2013), the influence of firm characteristics and FRQ (Appiah, Awunyo-Vitor, Mireku, & Ahiagbah, 2016), financial reporting and tax compliance (Abedana, Omane-Antwi & Oppong, 2016;Amidu, Yorke & Harvey, 2016), audit and cost of capital (Coffie, Bedi, & Amidu, 2018), FRQ and audit fees (Musah, Anokye, & Gakpetor 2018), IFRS and financial reporting in banks and manufacturing firms (Abata, 2015;Okoye & Nwoye, 2018), financial reporting and economic growth (Temitope, Chibuzo, & Tolulope, 2019), and FRQ and corporate governance (Uwalomwa, Eluyela, Olubukola, Obarakpo, & Falola, 2018;Eyenubo, Mohamed, & Ali, 2017). However, it is surprising that no study as far as the researcher knows has been done to assess the extent to which published financial reports of listed firms truly reflect FRQ dimensions proposed by IFRS and IASB, especially in Ghana.…”

Section: Introductionmentioning

confidence: 99%

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Assessing Financial Reporting Quality of Listed Companies in Developing Countries: Evidence from Ghana

Mbawuni¹

2019

IJEF

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The adoption of International Financial Reporting Standards (IFRS) in Ghana is expected to improve the quality of financial reporting among companies in Ghana. This paper assesses the extent to which financial reports of companies listed on the Ghana Stock Exchange (GSE) meet financial reporting quality (FRQ) dimensions of IFRS. It was a descriptive study that employed two experienced professional chartered accountants who practice as independent auditors to use FRQ criteria to assess financial reports of 20 purposively selected companies listed on GSE for 2012 and 2013. Given the high inter-rater reliability (r = .96, 95% C.I., p < .0001), the findings indicate that, overall, FRQ of the listed companies meet FRQ standards by 56.48%. Generally, the financial reports were 60.95% faithfully represented, 51.01% relevant, 50.10% understandable, 40.09% comparable and 19.75% timely audited (or 80.25% untimely). Fundamental FRQ characteristics were more prevalent than enhancing FRQ. Poorly rated FRQ areas were in the use of historical cost as measurement basis, no use of graphs and tables to clarify information, no inclusion of comprehensive glossary, ratios and index, no information on adjustment in past accounting figures for future decisions, and no comparison of current and previous accounting periods and with those of other firms. The study concludes that FRQ of the listed companies is moderate but needs considerable improvement. Implications to theory, practitioners, policy makers and industry regulators are discussed. This study fills the dearth of empirical research in FRQ in IFRS-compliance companies in Sub-Saharan Africa in general and Ghana in particular.

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Section: Faithful Representationmentioning

confidence: 99%

Section: Adoption Ifrs In Ghanamentioning

confidence: 99%

Section: Practical Implicationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Assessing Financial Reporting Quality of Listed Companies in Developing Countries: Evidence from Ghana

Mbawuni¹

2019

IJEF

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“…On the other hand, in developing countries that have adopted IFRS like Ghana, in spite of increasing research in the area of IFRS adoption and its attendant influence on FRQ, empirical research on user perception of the quality of published annual reports of companies is very limited. Much of the empirical research in African countries have focused on compliance and disclosures (Odia & Ogiedu, 2013;Zakari, 2014;Agyei-Mensah, 2013), the influence of firm characteristics and FRQ (Appiah, Awunyo-Vitor, Mireku, Ahiagbah, 2016), financial reporting and tax compliance (Abedana, Omane-Antwi & Oppong, 2016), audit and cost of capital (Coffie, Bedi & Amidu, 2018), FRQ and audit fees (Musah, Anokye & Gakpetor, 2018), financial reporting and corporate governance (Uwalomwa, Eluyela, Olubukola, Obarakpo & Falola, 2018). Despite the fact that the literature highlights the importance FRQ plays in influencing economic decision of stakeholders, there is dearth of empirical research on users' assessment of the qualitative characteristics of FRQ of companies developing countries in general, Ghana in particular.…”

Section: Introductionmentioning

confidence: 99%

Users’ Perception of Financial Reporting Quality in Ghana

Mbawuni

2019

AFR

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This paper assesses the extent to which top and middle management perceive FRQ of companies in Ghana after the adoption of International Financial Reporting Standards (IFRS). Drawing from the literature, a five-dimension FRQ questionnaire was developed for the study. It was a cross-sectional survey that involved a sample of 500 respondents from top and middle level management across seven industries in Ghana. The findings indicate that, generally top and middle management perceive the qualitative characteristics of FRQ of the Ghanaian companies to be very good. However, Timeliness of FRQ in terms of publishing audited financial reports was the only poorly rated qualitative characteristic. Implications to accounting theory and practitioners are discussed. Moreover, there were differences in respondents’ perception of FRQ according to their work background characteristics. It was found that top and middle management who were professional accountants were more critical in their assessment and therefore rated their perceived FRQ significantly lower than those who were non-accounting professionals. This study contributes to filling the void in FRQ literature regarding accounting information users’ assessment of FRQ in IFRS-compliant countries in Sub-Saharan Africa.

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