International Financial Reporting Standards Disclosure Compliance in Ghana: A Study of GSE-Listed Companies

Israel Duodu

doi:10.51867/scimundi.5.1.11

Authors

Israel Duodu West End University College, Ghana https://orcid.org/0009-0005-9089-1226

DOI:

https://doi.org/10.51867/scimundi.5.1.11

Keywords:

Compliance, Disclosure, Ghana Stock Exchange, International Financial Reporting Standards

Abstract

This study empirically examines the extent to which companies listed on the Ghana Stock Exchange (GSE) comply with International Financial Reporting Standards (IFRS) disclosure requirements and identifies key factors influencing compliance levels for 2023. The study employed an inductive and descriptive research design. Proprietary Cost Theory and Agency Theory guided this study. The study examines five factors influencing compliance: company size, leverage, liquidity, auditor type, and industry category. Compliance is measured using the item-based compliance index (COMDEX) A disclosure checklist, derived from IFRS requirements in the 2022 Deloitte Touche Tohmatsu Limited publication, includes 406 disclosure items from 21 IFRS and IAS standards. The annual reports of 32 GSE-listed companies were assessed using this disclosure index. Both descriptive (frequency, percentage, mean, and standard deviation) and inferential statistics (Pearson Correlation and Multiple Regression) were used in the analysis of the data obtained. Findings indicate moderate IFRS compliance among sampled firms, with an average compliance index of 70.28%, reflecting reasonable yet varied adherence across standards. Multiple linear regression analysis reveals that profitability (β = 0.033, p = 0.026), firm size (β = 0.018, p = 0.001), leverage (β = 0.001, p = 0.641) and industry type (β = 0.028, t = 2.968, p = 0.007) significantly influence compliance, while liquidity (β = - 0.79, p = 0.999), and auditor type (β = -0.057, p = 0.061) do not exhibit statistically significant effects. The study also highlights the dominance of Big 4 audit firms in the GSE-listed market, though their presence does not necessarily ensure higher compliance. The study concludes that while IFRS compliance among firms listed on the Ghana Stock Exchange is moderate and influenced by factors such as firm size, profitability, and industry type, significant variability across standards and the limited impact of auditor type highlights the need for targeted regulatory efforts. Results suggest that financial stability and regulatory pressure play a crucial role in driving IFRS adherence. To improve compliance, the study recommends stricter regulatory enforcement, targeted training programs, and the use of technology to streamline financial reporting.

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