CHALLENGES AND PROSPECTS OF ADOPTION OF IFRS IN ETHIOPIAN FINANCIAL INSTITUTIONS

Abstract

This study focuses on the adoption of international financial reporting standards (IFRS). Challenges and prospects of ifrs adoption in Ethiopian financial institutions. The study use both primary and secondary data. The primary data were collected through questioner and oral interview and secondary data were collected from companies‟ profiles, proclamations, and regulations. Stratified random sampling was employed for questioners and purposive sampling for interview. The data collected using the above instrument was analyzed by descriptive statistics like frequency distribution and percentile. IFRS was adopted officially in December, 2014 and the main objective of IFRS is to globalize the diverse business language being used by business communities all over the world. The main objective of the research is to a certain weather IFRS adoption is costly, to describe the benefits and challenges of IFRS adoption. Finally the study displayed practical implication for government of Ethiopia and financial institutions to use proper application of all adopted standards. The study also suggest that rigorous IFRS capacity building program should be undertaken by the government, companies and training institutions in order to provide the needed man power for IFRS implementation.