Factors influencing International Financial Reporting Standards (IFRS) implementation success: Evidence from Ethiopia

Abstract

Drawing on Institutional and Economic Network Theories, this study investigated factors influencing International Financial Reporting Standards (IFRS) implementation success in Ethiopian business organizations identified as Public Interest Companies by the government which were expected to adopt IFRS for the year ending June 30, 2018. The study adopted explanatory method to answer the research questions and test hypotheses stated. Data were collected from 123 respondents in 22 first time IFRS adopting business organizations using questionnaires. The findings of the study revealed that economic factors, project governance factors and cultural factors were found to influence project success at 5% level of significance whereas influence of institutional pressures was accepted at 10% level of significance (sig=0.055, closer to 5% of course). Contrary to the literature, economic factors were not positively correlated to IFRS project success as the firms were predominantly operating locally and due to IFRS implementation costs. Project governance factors were found to contribute significantly for IFRS project success in the firms studied. This was in line with the project management literature that proper project governance will turn even a highly risky project into a success. In addition, there was no statistically significant difference in the IFRS project implementation success of private and public firms. Future research shall consider additional variables that influence IFRS project success and other firms that implemented IFRS in the next years as well as regional level public enterprises.