Challenges of International Financial Reporting Standard Implementation in Ethiopia: A Case Study of Selected Agricultural Sector under Horizon Plantation.

Abstract

International Financial Reporting Standards (IFRS) becomes internationally accepted standard which is adopted and implemented in many jurisdictions to harmonize financial reporting throughout the globe. As Ethiopia is also one of those countries which accept this standard and starts adopting it. Therefore, this study aims to assess the Challenges of IFRS implementation in Ethiopia: A Case study of selected agricultural sectors under Horizon Plantation located in South West part of Ethiopia. The study employed mixed research approach to achieve the research objectives and to achieve this objective, both primary and secondary data were collected from 74 finance, internal audit, marketing staff and managers of all selected agricultural Sectors under Horizon Plantation who were selected purposively based on their role and involvement in the implementation process. Primary data were collected through questionnaire and interview whereas secondary data were collected through documentary evidence and the questionnaire data was analyzed by using different descriptive statistical tools such as SPSS version 20 and data from interview and documentary evidence were interpreted qualitatively. Finally, the result of the study revealed that lack of attention and management understanding about IFRS, Lack of qualified people to provide training in profession or workplace, lack of supports from accountancy professional bodies, weak enforcements of regulatory body, and high cost of implementation and weak management support are the major challenges of IFRS implementation by these selected agricultural sectors under Horizon Plantation. Therefore, the Horizon Plantations, regulatory organs and consultants are recommended to improve management involvement, provide workplace trainings, to implement by customizing the standard, to improve cost issues of the standard, and to improve the cooperation of the organs involving in the implementation.