Paul Muda, John MacCarthy, Kingsley Tornyeva and Nora Danso

Correspondence: John MacCarthy, john_maccarthy@hotmail.com

Accounting Department, University of Professional Studies, Accra, Ghana.

pdf (570.54 Kb) | doi: https://doi.org/10.47260/bae/1213

Abstract

The purpose of the study was to assess the direct and indirect effect of institutional isomorphic pressures on the adoption of IFRS for SMEs in Ghana. This study administered a questionnaire to collect primary data to assess the relationship between the variables. Multistage sampling methods were used to select the sample size as the true representative of the 16 regions of Ghana without bias. The study employed factor analysis, and structural equation model analysis to test the null hypotheses in this study. The results revealed that coercive isomorphic and mimetic isomorphic pressures significantly affect the adoption of IFRS for SMEs positively in Ghana. Secondly, the result showed that firm resilience partly mediates the direct relationship between coercive, mimetic isomorphic pressures and the adoption of IFRS for SMEs. However, normative isomorphic pressure has no direct or indirect (mediation) effect on the adoption of IFRS for SMEs in Ghana. The study recommends that the government must place emphasis on both internal and external drivers, particularly the firm’s resilience, to facilitate more successful adoptions of IFRS for SMEs in Ghana. Secondly, the government needs to encourage accountants in SMEs to join professional accounting bodies. Again, the study recommends that the government, through the Ministry of Trade and Industry (MoTI), collaborate with the regulator (ICAG) to provide financial accounting education to SME owners and accounting personnel who lack the necessary skills to adopt and implement IFRS for SMEs in Ghana. Finally, Ministry of Trade and Industries should establish a special pathway for non-professional accounting personnel in SMEs to become ICAG members and receive incentives.

Keywords:

  IFRS for SMEs, Coercive pressure, Normative pressure, Mimetic pressure, Isomorphic pressure.

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