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Comparison of IFRS and OHADA’s accounting quality
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper compares the accounting quality of the International Financial Reporting Standards (IFRS) and the Organization for Harmonization of Businessin Africa (OHADA) standards. These accounting standards are primarily used in the French-Speaking sub-Saharan countries. Literature argues that OHADA standards blend the French-German and the Anglo-Saxon accounting traditions to meet the requirements of a reporting framework for a globalized economy and hence they are like IFRS. Using a casual-comparative research design and collecting data from commercial banks using these two types of accounting standards, this study finds that the quality of accounting differs in IFRS and OHADA in terms of earnings management and loan loss recognition. Commercial banks reporting under IFRS show indices of less earnings management and less conservatism as compared to those reporting under OHADA standards. This paper contributes to literature by quantitatively complementing existing qualitative research which has concluded that OHADA standards should come up with substantial revisions in their conceptual framework if they have to meet their objective of reporting the real economic activity of a firm.

Keywords [en]
IFRS, OHADA, earnings management, loan loss recognition, accounting conservatism
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-42276OAI: oai:DiVA.org:hj-42276DiVA, id: diva2:1269924
Available from: 2018-12-11 Created: 2018-12-11 Last updated: 2018-12-11Bibliographically approved
In thesis
1. The adoption and implementation of International Financial Reporting Standards (IFRS) in Rwanda
Open this publication in new window or tab >>The adoption and implementation of International Financial Reporting Standards (IFRS) in Rwanda
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Accounting has played a significant role in globalization through instruments like the International Accounting Standard Board (IASB), the International Federation of Accountants (IFAC) and the International Financial Reporting Standards (IFRS) which have harmonized global business practices. With the spread of globalization, the persistence of local realities has become a global issue. While IFRS has been adopted across the world, local contexts are impeding its smooth implementation.

This study investigates this phenomenon in the Rwandan context by discussing how IFRS has been adopted by commercial banks in Rwanda and in sub-Saharan African countries. In Rwanda, IFRS’ adoption was influenced by the country’s economic context (dire need for reconstruction), social context (Rwandans with different accounting traditions due to the conflict and the movement of people across the region and in the world and their returning to their home country) and the political context (colonial legacy and accounting initiatives of the independent African countries and Rwanda’s regional and international integration policies).

My findings suggest that the adoption of IFRS was done after intense preparations and its implementation was monitored as it was believed that these standards would catalyze the government’s economic development goals. The findings also show the bi-directional relationship between accounting and the environment in which it operates. While IRFS’ adoption was swayed by the prevailing environment these standards also formed a part of the country’s strategy for economic development and a mechanism for promoting equity among its citizens.

The findings also show that the professionalization of accounting was context bound and was influenced by the accounting environment in Rwanda and that professionalization contributed to conflict prevention and resolution among accounting practitioners. The study also shows that the government played a big role in the development of accounting as a profession.

Abstract [sv]

Redovisning har spelat en betydande roll i globaliseringen genom instrument som International Accounting Standard Board (IASB), International Federationen of Accountants (IFAC) och International Financial Reporting Standards (IFRS) vilka har harmoniserat global affärspraxis. Med spridningen av globalisering har beständigheten i lokala realiteter blivit en global fråga. Medan IFRS har införts över världen har den smidiga implementationen hämmats i lokala kontexter.

Denna studie undersöker detta fenomen i den ruandiska kontexten genom att diskutera hur IFRS har införts av affärsbanker i Ruanda och i afrikanska länder söder om Sahara. I Ruanda influerades IFRS-införandet av landets ekonomiska kontext (trängande behov av rekonstruktion), social kontext (ruandier med olika redovisningstraditioner beroende på konflikten och migrationen av folk över regionen och i världen och deras återvändande till sitt hemland) och den politiska kontexten (kolonialt arv och redovisningsinitiativ från självständiga afrikanska stater och Ruandas regionala och internationella intergrationspolicies).

Mina resultat indikerar att införandet av IFRS gjordes efter intensiva förberedelser och dess implementering övervakades eftersom man trodde att dessa standarder skulle katalysera regeringens ekonomiska utvecklingsmål. Resultaten visar också den dubbelriktade relationen mellan redovisning och den omgivning i vilken den verkar. Medan införandet av IFRS vacklade hos den rådande omgivningen, formade dessa standarder också en del av landets strategi för ekonomisk utveckling och en mekanism för att främja rättvisa bland dess medborgare.

Resultaten visar också att professionaliseringen av redovisning var kontextbundenoch påverkades av redovisningsmiljön i Ruanda och att professionalisering bidrog till attförhindra och lösa konflikter hos redovisningspraktiker. Studien visar också attregeringen spelade en stor roll i utvecklandet av redovisning som profession.

Place, publisher, year, edition, pages
Jönköping: Jönköping University, Jönköping International Business School, 2018. p. 33
Series
JIBS Dissertation Series, ISSN 1403-0470 ; 129
National Category
Business Administration
Identifiers
urn:nbn:se:hj:diva-42277 (URN)978-91-86345-91-4 (ISBN)
Public defence
2018-12-19, B1014, Jönköping International Business School, Jönköping, 13:15 (English)
Opponent
Supervisors
Available from: 2018-12-11 Created: 2018-12-11 Last updated: 2018-12-11Bibliographically approved

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Shema, Jean Bosco

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