Benefits and Challenges of International Financial Reporting Standard (IFRS) Transition in Ethiopia (Case Study on Some Selected Organizations in Ethiopia)

Netsanet Shiferaw


The purpose of this study is to assess the transition of International Financial Reporting Standards (IFRS) in Ethiopia: the benefits, prospects and challenges of its adoption and implementation in the case of 13 significant PIEs. The study employs both quantitative and qualitative methods (mixed) research approach. Both primary and secondary data sources were used for the study.  The respondents are selected by using judgmental sampling technique. Then, the collected data from those organizations is analyzed by descriptive and econometric analysis by using SPSS software. The results revealed that the adoption of the IFRSs has improves the efficiency and effectiveness of financial reporting, provides better information for decision making, enhanced the accuracy; reliability and comparability of accounting information, simplify the process of Merger/Acquisition , enables greater effectiveness of the internal audit, brings better corporate governance, reduce cost of capital , better access to capital market , harmonize the reporting standard , better risk management, promotes cross border investments and provide timely financial report. However, there is serious educational, technical and institutional challenges that the country need to overcome in order to benefit fully from the adoption of IFRS.

Index Terms- International Financial Reporting Standards, Benefits, prospect, Challenge, implementing.

DOI: 10.7176/RHSS/10-11-03

Publication date:June 30th 2020

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ISSN (Paper)2224-5766 ISSN (Online)2225-0484

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