Examining the Level of Awareness and Adoption of IFRS among SMEs in the Selected Countries in West Africa: Influence of Challenges

Abstract

This study examines the level of awareness and adoption of the International Financial Reporting Standards (IFRS) among small medium size enterprise (SMEs) in Ghana, Nigeria, Senegal, and the Ivory Coast, and the influence of challenges. The study used an explanatory design of the quantitative approach underpinned by a positivist philosophy. Data were collected through structured questionnaires administered both online and face-to-face, following ethical clearance from the university's ethics committee. The sample included respondents from SMEs across four West African countries: Ghana (347 respondents), Nigeria (70 respondents), Senegal (58 respondents), and the Ivory Coast (42 respondents). With the aid of Smart PLS software, Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to test hypotheses. An asymmetric analysis was conducted using fsQCA software. There was a moderate level of challenges of IFRS among SMEs in West Africa. Nevertheless, this implies that awareness is crucial for successful adoption, and that efforts to improve on challenges also facilitate adoption. It is recommended that policymakers and regulators should develop interventions that distinctly focus on adoption, such as training, sensitization campaigns, and professional education and compliance augmentation, such as monitoring, enforcement, and technical assistance. Furthermore, practical guides and tools should be developed to assist SMEs in understanding complex IFRS requirements. Collaboration with local and regional accounting bodies to provide subsidized training programs would also help alleviate the burden of IFRS adoption, ensuring that SMEs are better equipped to handle the complexities they face.