Implementation Of International Financial Reporting Standards For Small And Medium Enterprises In Ghana: Prospects And Challenges

Abstract

The study assessed the implementation of International Financial Reporting Standards for Small and Medium Enterprises in Ghana. Precisely, the study ascertained factors influencing the implementation of IFRS for SMEs; identified the extent of implementation of IFRS for SMEs and examined the challenges associated with the implementation of IFRS for SMEs in Ghana. Primary data was sourced through questionnaire administered to 230 firms licensed from the Institute of Chartered Accountants, Ghana. Statistical Package for the Social Science (SPSS) version 21 was used to process the study data. The study employed explanatory research design. The main findings of the study were that IFRS for SMEs implementations enable SMEs to obtain financial assistance from financial institutions, improve their financial reporting and enhance SMEs financial reporting transparency. Also, the study found that audit firms often implement IFRS for SMEs on their financial statement presentation, statement of financial position, income statement, among others. The study shows that the implementation of IFRS for SMEs in Ghana is characterized with high compliance cost, lack of skilled personnel, lack of clarity of expressions among others. Hence, it was recommended that the management of audit firms in Ghana should start raising awareness among SMEs partners, managers and finance teams about the benefits of IFRS implementation. Again, the IFRS for SMEs implementation in Ghana should be tailored to specific needs of each business. Finally, the management of audit firms should offer training workshops to build a strong foundation for successful IFRS for SMEs implementation.