International Financial Reporting Standards (IFRS) Adoption, Corporate Governance, Audit Quality And Reporting Quality; Evidence From Non – Listed Manufacturing Firms In Ghana

Abstract

The study evaluated how corporate governance influences the relationship between the adoption of IFRSs, audit quality, and reporting quality in Ghanaian manufacturing enterprises. The study focused on the population of manufacturing companies in Ghana, employing a structured questionnaire as the primary data collection tool. A simple random sampling technique was used to select a total of 250 respondents. The data was analyzed using the covariance-based structural equation modelling in Amos (version 23). The approach adopted in the research was quantitative, non-experimental, and utilized both survey and cross-sectional research strategies. The study reviewed that the adoption of IFRSs has a negative and insignificant impact on financial reporting quality. Conversely, the quality of the audit process had a statistically significant and positive effect on financial reporting quality. Furthermore, the study reviewed that there is a significant and positive relationship between corporate governance and the quality of financial report. Notably, the study revealed that the nexus between the adoption of IFRSs and the caliber of quality of financial report is moderated by corporate governance. The report provides industrial organizations with recommendations based on these finding. Firstly, it advises these firms to consider implementing IFRSs during the preparation and in the presentation of financial statements. Additionally, management of manufacturing firms should prioritize adherence to corporate governance principles in the management of their entities. Furthermore, internal audit units in these firms should adhere to the ethical guidelines outlined by the Institute of Internal Auditors (IIA). The study proposes that committee members must have diverse experiences and skills, allocate sufficient time to attend board meetings, and conduct regular follow-ups to assess the corrective actions taken in response to identified issues. Lastly, the study encourages the continuous training and professional development of internal audit staff through relevant programs.