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Do globalisation and adoption of IFRS by banks in Africa lead to less earnings management?

Mohammed Amidu (Department of Accounting, University of Ghana, Accra, Ghana)
Haruna Issahaku (Department of Economics and Entrepreneurship Development, University for Development Studies, Tamale, Ghana)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Article publication date: 24 June 2019

Abstract

Purpose

This paper aims to analyse the implications of globalisation and the adoption of international standards (International Financial Reporting Standards [IFRS]) for accounting information quality.

Design/methodology/approach

This paper uses a sample of 329 banks across 29 countries leading up to and beyond the implementation of IFRS to test for related hypotheses.

Findings

First, banks’ financial statements are prepared on the basis of international standards as national economies are integrated when social norms are diffused. Building on these results, the second test suggests that the relatively high-quality earnings among banks in Africa during the period is attributable to the adoption of and interaction of IFRS with globalisation and the strategy of banks to diversify within and across interest and non-interest income.

Originality/value

The authors investigate how globalisation and the adoption of IFRS affect accounting information quality.

Keywords

Citation

Amidu, M. and Issahaku, H. (2019), "Do globalisation and adoption of IFRS by banks in Africa lead to less earnings management?", Journal of Financial Reporting and Accounting, Vol. 17 No. 2, pp. 222-248. https://doi.org/10.1108/JFRA-05-2017-0035

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited