Benefit and Challenges of adopting IFRS in Case of commercial Bank of Ethiopia Addis Ababa, Ethiopia

Abstract

Background: International Financial Reporting Standards (IFRS) have been adopted by 143 countries around the world. The goals of the IFRS is to develop, in the public interest, a single set of high-quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles. However, its adoption and implementation bring opportunities and create challenges to the adopter. The main objective of this study is to assess the adoption, challenges and benefits of (IFRS) in case of Commercial Bank of Ethiopia. Methods: The study used both primary and secondary sources. The primary data was collected through predesigned questioners and secondary data was collected from the Bank report, scientific papers and proceedings relevant to the study using document, annual financial reports, proclamations and regulations that deal with financial reporting issues by the bank that deal with financial reporting issues in Ethiopia. Findings: The study found that commercial bank of Ethiopia have started using IFRS voluntarily for the preparation of their financial statements without making necessary awareness but nationally; IFRS is adopted officially in December 5, 2014 through enactment of Proclamation. And from the analysis of survey that in the dependent and independent variables there is significant relationship. Among those the IFRS on the quality of financial reporting has significant relationship with the transparency, accountability and economic efficiency. The result of the study will provide a good lesson for other Financial Institution, Governmental and Policy Makers for the implementation of IFRS network