IFRS IMPLEMENTATION READINESS IN ETHIOPIA: THE CASE OF PRIVATE COMMERCIAL BANKS

Abstract

International Financial Reporting Standards (IFRSs) have been implemented by many countries to bring uniform accounting standard around the globe. Organizational readiness for change is an important factor in successful implementation of new policies, programs, and practices. And IFRS implementation is considered as organizational change of policy, program and practices. Hence this study is conducted to assess the readiness of Ethiopian private commercial banks to implement IFRS. Specially to study how the banks value the implementation, change efficacy of the banks and the contextual factors that affect these banks during the implementation of IFRS. In order to achieve its objective of the study gathered primary and secondary data from the entire private banks of Ethiopia through open and close ended questionnaires. In addition to that AABE representative has been interviewed. And during the research mixed approach or the hybrid of the quantitative and qualitative approaches were used. The researcher also adopted a descriptive method of research design which helps to describe the major findings of the study by taking the research questions into consideration. The data were analyzed through help of statistical package for social science and micro soft excel software. The findings revealed that the Ethiopian private banks give high value for the implementation and the contextual factors of the banks support the implementation of IFRS in Ethiopia. On the other hand the banks have doubt on the change efficacy, especially on the availability of expertise, skill and time to the implementation. Finally, based on the findings the study brought conclusion and recommendations for all private banks and other stakeholders on IFRS implementation. The key recommendations are to increase skill and expertise by facilitating more training, not only for phase 1 but also for the next phases as per AABE road map.