ABSTRACT
Small and medium-sized enterprises (SMEs) are regarded as the drivers of economic development across the world. Their reporting needs which were neglected for so long a time were finally given attention with the introduction of a simplified accounting standards (IFRS for SMEs). The introduction of this standalone accounting standards for SMEs was geared towards the objective of addressing SMEs financial reporting needs and improving the quality of their financial reporting. To this end, a quasi-experimental study was set up to examine whether the adoption of the IFRS for SMEs has improved the financial reporting quality of SMEs in Ghana. A six-year time series analysis was performed on twenty randomly selected SMEs resulting in 120 years of observation. Three years (2011, 2012 and 2013) represented the pre-adoption period while years 2014, 2015 and 2016 represented post adoption period. Using the current model for assessing financial reporting quality (decision usefulness model), total quality indexes were derived for each qualitative characteristic under study. The one-way analysis of variances (ANOVA) was employed separately for the hypotheses formulated for the study. The study concluded that, the decision usefulness of SMEs financial reporting has improved with regards to relevance, verifiability, understandability and comparability subsequent to the adoption of the IFRS for SMEs. The adoption of the standard however had no significant effect on the faithful representation quality of SMEs financial reporting. Policy makers should therefore promote the firm level adoption of the standard and put in place measures to increase the level of compliance of the standard so as to increase the quality of financial reporting of this important sector.
KEY WORDS
IFRS for SMEs
International Financial Reporting Standards
SMEs financial Reporting Quality
Qualitative Characteristics Measurement
BAFFOUR, J (2021). INTERNATIONAL FINANCIAL REPORTING STANDARDS FOR SMALL AND MEDIUM-SIZED ENTERPRISES ADOPTION AND THE FINANCIAL REPORTING QUALITY OF SMALL AND MEDIUM-SIZED ENTERPRISES IN THE ACCRA METROPOLIT. Afribary. Retrieved from https://afribary.com/works/international-financial-reporting-standards-for-small-and-medium-sized-enterprises-adoption-and-the-financial-reporting-quality-of-small-and-medium-sized-enterprises-in-the-accra-metropolitan
BAFFOUR, JULIANA "INTERNATIONAL FINANCIAL REPORTING STANDARDS FOR SMALL AND MEDIUM-SIZED ENTERPRISES ADOPTION AND THE FINANCIAL REPORTING QUALITY OF SMALL AND MEDIUM-SIZED ENTERPRISES IN THE ACCRA METROPOLIT" Afribary. Afribary, 22 Mar. 2021, https://afribary.com/works/international-financial-reporting-standards-for-small-and-medium-sized-enterprises-adoption-and-the-financial-reporting-quality-of-small-and-medium-sized-enterprises-in-the-accra-metropolitan. Accessed 20 May. 2024.
BAFFOUR, JULIANA . "INTERNATIONAL FINANCIAL REPORTING STANDARDS FOR SMALL AND MEDIUM-SIZED ENTERPRISES ADOPTION AND THE FINANCIAL REPORTING QUALITY OF SMALL AND MEDIUM-SIZED ENTERPRISES IN THE ACCRA METROPOLIT". Afribary, Afribary, 22 Mar. 2021. Web. 20 May. 2024. < https://afribary.com/works/international-financial-reporting-standards-for-small-and-medium-sized-enterprises-adoption-and-the-financial-reporting-quality-of-small-and-medium-sized-enterprises-in-the-accra-metropolitan >.
BAFFOUR, JULIANA . "INTERNATIONAL FINANCIAL REPORTING STANDARDS FOR SMALL AND MEDIUM-SIZED ENTERPRISES ADOPTION AND THE FINANCIAL REPORTING QUALITY OF SMALL AND MEDIUM-SIZED ENTERPRISES IN THE ACCRA METROPOLIT" Afribary (2021). Accessed May 20, 2024. https://afribary.com/works/international-financial-reporting-standards-for-small-and-medium-sized-enterprises-adoption-and-the-financial-reporting-quality-of-small-and-medium-sized-enterprises-in-the-accra-metropolitan