Compliance with international financial reporting standard 7 (IFRS 7): A study of listed banks in Ghana

Abstract

The aim of this study is to identify the extent to which listed banks in Ghana comply with International Financial Reporting Standards, with particular reference to financial instruments IFRS 7. It also seeks to identify the formal mechanism employed to monitor and enforce IFRS compliance in Ghana. In addition, it is further intended to identify the problems listed banks encounter in complying with IFRS. The level of mandatory compliance with IFRS 7 was measured using a mandatory disclosure index (MDI) which the researcher developed from a self-constructed compliance checklist. A semi structured interview guide was also used to gather data for the study. The sample consisted of six listed banks and covers the period 2008 and 2009. The overall results show a high degree of compliance with IFRS 7, though not absolute. The study reveals the existence of a monitoring and enforcement mechanism which the researcher finds to be not too rigorous. Finally, the study identifies the number of regulatory requirement listed banks had to comply with in addition to the IFRS requirements, the ever changing IFRS, and the inability of the banks to automate the IFRS into their system to make it easier and faster for financial statement preparation, as some of the major challenges that listed banks go through in complying with the IFRS.