I hope that African countries will resist to spending money on standards coming from a post box in Delaware.

Dear Vincent,

I think this is also a question of demand. If African capital markets want to attract money, as is presumably the case, they can buy foreign know-how and invest in regulatory and enforcement authorities in order to implement IAS/IFRS.

When I am speaking about foreign know-how, I assume that the companies listed of African stock exchanges will probably turn to the Big Four or some of the other global players, as financial statements audited by minor and less well known local auditors may struggle to offer the same level of assurance to finance providers. This is even the case in developed markets for decades now.  In doing so, they will get the know-how necessary for the implementation of the IAS/IFRS.

Also, the number of accountants or of the audit firms may be misleading. It is the level of the education and the quality of the professional courses at place which matter.

Paul

Hello Alexander ..

thanks for you comment.. So do you propose that African countries should not adopt IFRS. IF yes what can be the alternative.

Please i did not get the meaning of post box in Delaware.

thanks

good argument Paul.

You second section raises a grey area in IFRS adoption i wanted to explore but finding it difficult to generate data to support my argument.

I am of the view that the adoption of IFRS is promoting the big4 firms and international accounting qualifications like the ACCA especially in developing countries.

Arguably such attendant consequences will kill local auditing firms to create monopoly for the big4.

Pual i will be happy if you can share more light on this argument.

thanks

The IFRS alleged 'standards' are created by the IASB (International Accounting Standards Board) that is controlled by the IASF (International Accounting Standards Foundation) that has been founded in 2001 in the US tax heaven Delaware.

The meaning of IFRS is to avoid tax payment in order to enhance the currency of the stock for acquisitions and hiring employees.

This only works in states that promote tax avoidance such as the US and the UK. The standard is provided by the 'Big Four'.

IFRS standards only work if you have rating agencies that rate these countries and IFRS companies with AAA so that the country can raise the money lost with IFRS by sovereign debt - such as in the US, UK, Germany and the Netherlands.

But Africa firstly needs to build up public goods which can only happen by raising taxes. The international standards - finally all made in USA - exclude these countries and their companies from the capital markets.

IFRS will cost an African Company 10 per cent of the turnover and 70 per cent of the profit. It's a bribe with the promise to bring the stock to the portfolios of Blackrock, Vanguard who pay shares in real economy (commodities, real estate, agriculture, products) by worthless US fiat money.

In the next step they promote 'Governance' to having this deal secured and set pressure on the state to privatize all services and infrastructure and to allow tax gifts for these companies.

I can only recommend Africa not to allow IFRS and not to accept these rules that only help a few countries that can print their GDP by sovereign debt and to finance their alleged 'foreign investment' by zero per cent interests while you in Africa have to pay between 5 and 27 per cent interests.

Thanks Alex for the insight

Dear Vincent,

I think you are right that the adoption of IFRS will promote the Big4, but mainly for listed companies. The survival of local audit firms, however, will depend on the company law and other regulations at place. For example, statutory audits are mandatory in UK and in Germany for non-listed companies, too (subject to certain requirements). This creates a fruitful market for the small local audit firms. Also, small firms often provide other accounting services besides audit, for example tax services, financial statement preparation, bookkeeking, forensic accounting, business consulting.   

With regard to ACCA and similar qualification: their focus is clearly on the stock exchange. Hence, if you are ACCA-qualified, you may have a better standing in a Big4 firm. Again, I do not see any necessity for an african accountant to qualify with ACCA if he is going to work in private local practice. To the contrary, he should be an expert in local GAAP. However, the current IAS/IFRS represent the state-of-the-art of today, so in order to be an insightful expert, one should obtain IAS/IFRS knowledge.

With regard to the adoption of IAS/IFRS by African countries, I think there are lots of other things to do in order to benefit from the adoption. IAS/IFRS call for a reliable enforcement regime. Indeed, every accounting standard does, but IAS/IFRS heavily rely on "fair value", contrary to the "historical cost" principle of the old German GAAP. Hence, there may be much manipulation with "fair value" at its measurement can be highly subjective. I do not know whether the African markets are prepared to face such challenges. We have made some research on the IAS/IFRS implementation in Kenya. I think our paper will be published next year. The results are mixed. Kenya's standing after the conversion / revision of  IAS/IFRS is better, than before, but not as good as in develped markets. I think this can be traced back to the weak control and enforcement environment.

Paul 

Thanks Paul for your comment

Please alert me when you paper on Kenya is published

thanks

Dear Vincent,

I will send you our paper once it is published.

Paul

Dear Vincent,

In latin américa, exist the organisation Glenif, you can find many papers about this topic on www.gleniif.org, and you can make comparations with other countries.

Dear Diego

thanks for your answer

unfortunately i could not access the website so please if you can can some of the papers in English and email it to me [email protected] i will be happy

thanks 

regards

Based on my understanding of your question, your study will be more of compliance study for those African countries that already adopt IFRS. If you like to study readiness to adopt I think institutional qualities are better measure because the number of accountants and number of audit firms does not really capture a country readiness to adopt. However, institutional qualities such as strength of reporting regime etc. should be okay.

All the best!

what about the details of presentation in the financial statements, the extent of disclosure in the companies footnotes, training programs provided by professional institutions, the growth in the number of qualified accountants within the last couple of years, the extent of government willingness to enforce the implementation of IFRS, the nature and number of courses taught about IFRS in school of business in various universities ...etc.

One of the ways to measure readiness is to ascertain the Institutions the govt of the day has established & their charter (Mandate) in ensuring smooth transition.

Policy inclined Institution, (Measurement: Number of policies successfully implemented. Training inclined Institution, (Measurement: Number of Academics, Professionals trained. etc.

Dear Salau thanks for your contribution

the reason why i suggested using the number of accountants and number of audit firms is that is the accountants who will practices ifrs and auditing firms who provide judgement on hence if they are inadequate, a country is not likely to implement IFRS well.

Moreover the institutional qualities such as the strength of reporting regime in some way depends on the manpower such as the number of accountants and auditing firms.

your argument is good but is difficult to measure the strength of accounting institutions in Africa. However if you have model or variable i can use to measure the strength i will appreciate

thanks regards 

Dear Mohamed 

Thanks for your contribution, I currently looking at the details of financial statement to measure harmonization.

Your suggestions are good but getting proxy variables for them is difficult. For example, how do you measure government willingness to implement ifrs

Olamide i appreciate your suggestions. if you have large sample, it is always difficult to get data especially the number of policies which has been successfully to implement by government in difference countries

Dear Vincent, the development of accounting in a particular country depends on many different factors. Instead of applying a narrow quantitative model, I would suggest to examine the contextual factors that may influence the adoption of IFRS holistically. You may check Pudel, Hellmann and Perera, 2014, Advances in Accounting incorporating Advances in International Accounting for an example of a framework that you may use for this purpose.

Government willingness to measure IFRS implementation can be assessed through reports prepared by oversight boards concerning listed companies compliance with IFRS implementation. Also, if possible number of seminars, workshops and conferences held by government bodies concerning IFRS.

Thanks Andreas

I have downloaded your paper and I think it has lot of information.

 thanks Mohamed your suggestion is well noted. but the difficult is getting such data for different countries.

Most Africa countries do not include such reports in their reporting.