Does IFRS Adoption Improve Financial Reporting Quality? Evidence from Commercial Banks of Ethiopia

Abstract

The main purpose of this study is to analyze International Financial Reporting Standard (IFRS) adoption and quality of financial reporting by commercial banks in Ethiopia using qualitative characteristics of accounting information such as: Relevance, Understandability, Comparability, and Faith Representation. The study used the perceptions of preparers of banks financial reports (accounting & finance officer, finance managers as well as IFRS implementation team members) to analyze about IFRS adoption in commercial banks. The study adopted mixed research approach and descriptive research design. More specifically, the study used purposive sampling technique to collect a data; the data was collected through primary and secondary source of data. The primary data was collected through questionnaire and secondary data was from different source of documents. The data was analyzed using descriptive statistics. The finding of the study reveals that; the quality of financial report which is measured through (relevance, understandability, comparability and faith representation) was improved after adoption of international financial reporting standards.

Keywords: IFRS adoption, financial reporting quality, relevance, understandability, comparability, faith representation, commercial bank, Ethiopia.

DOI: 10.7176/RJFA/11-7-03

Publication date: April 30^th 2020