The Development of Accounting in Africa in the Era of International Financial Reporting Standards

This thesis consists of two separate, but related studies on the development of accounting in Africa in the era of International Financial Reporting Standards. The first part of this thesis presents the first empirical test of a hypothetical classification of financial reporting in Africa based on de facto or actual practices as opposed to de jure rules. Three multivariate techniques (principal component analysis, cluster analysis, and multidimensional scaling) were used to analyse the accounting policies of large, listed companies in Africa that are required by law to adopt IFRS. It was found that there is a dichotomy between the IFRS policy choices of companies in Francophone and Lusophone countries, on the one hand, and those in common law jurisdictions, on the other, thus confirming the two-group classification schemes proposed by Elad (2015) and Nobes (1983).

The results of this study extend previous research by demonstrating that international differences in financial reporting in Africa have survived in the era of IFRS and that pre-IFRS regulations enshrined in national and regional charts of account appear to have influenced IFRS policy choice. Furthermore, companies in common law countries tend to provide more extensive disclosures in their IFRS financial statements than their counterparts in code law countries.

These findings have important policy implications, particularly in the context of recent recommendations of the World Bank, the International Monetary Fund, and the Pan-African Federation of Accountants that large entities in Africa adopt IFRS. The systematic differences in the choice of IFRS options between companies in civil law and common law jurisdictions suggest that it would be difficult to achieve internationalcomparability and consistency in financial reporting.

The second part of the study uses semi structured telephone interviews to undertake interpretive accounting research (Baker and Bettner, 1997, p.293) to assess the perception of accounting professionals in relation to IFRS adoption and its use in Ghana. It concludes that despite the problems associated with its adoption and implementation, overall, International Financial Reporting Standards are viewed as necessary for the financial reporting needs of the country.