Adoption of IFRS / IAS in Ghana: Impact on the Qualityof Corporate Financial Reporting and Related Corporate Tax Burden

Abstract

The application of IFRSs reflects the combined effects of features ofthe financial reporting system, including standards interpretation, recognitionsand measurement and disclosures in the financial statements. We examine whetherapplication of International Financial Reporting Standards (IFRSs), associatedwith higher quality of disclosure has any association with corporate taxesburdens. This study adopted thedisclosure index approach to examine the financial reports of 22 Ghana StockExchange listed company to ascertain the disclosure quality levels of theirfinancial reports before and after adoption of IFRSs. The main standard at thecentre of the studies was IAS 12. Using Pearson’s correlation, we observed asignificant positive correlation between the disclosure quality (based on thequalitative characteristics of relevance, understandability, comparability andfaithful presentation) of listed firms following the adoption of IFRSs. Weconcluded that the quality of disclosure based on IAS 12 improved significantlyfollowing the adoption of IFRSs. Companies wishing make quality disclosure should continue to comply withthe IFRSs rigorously.     Keywords:DisclosureQuality Levels, Financial Reports, IFRS / IAS, Corporate Taxes