The Adoption of International Financial Reporting Standards and Quality of Financial reports of Small and Medium Enterprises in Uganda | ||
| International Journal of Multidisciplinary Studies on Management, Business, and Economy | ||
| Volume 7, Issue 1, June 2024, Pages 164-184 PDF (532.79 K) | ||
| Document Type: Original Article | ||
| DOI: 10.21608/ijmsbe.2025.296717.1010 | ||
| Author | ||
| Nasser Balikuddembe* | ||
| Accounting and Finance, School of Business Makerere University | ||
| Abstract | ||
| The goal of the national and international initiatives to adopt IFRS for SMEs is to raise the caliber of financial reports for SMEs. Regrettably, Ugandan SMEs' financial reports fall short of expectations, although ICPAU has required these organizations to follow IFRS for SMEs in their reporting. Based on the adoption position of ICPAU, Uganda is reported as one of the jurisdictions worldwide that report using IFRS for SMEs. Nevertheless, no research has been done to evaluate the rate of adoption within the nation as well as the elements that support or obstruct adoption. This study evaluated the adoption of IFRSs for SMEs as well as the factors that facilitate and hinder adoption. A cross-sectional survey design was used to gather information from 398 SMEs in the districts of Kampala and Mbarara. Data were gathered using questionnaires, interview schedules, and a checklist of documents. A thorough understanding of the results was produced by triangulating the data that was gathered from several sources. The findings show low adoption rates, with 35% of SMEs fully adopting IFRS, 54% partially adopting them, and 11% not adopting them at all. Additionally, with a disclosure index of 76%, the disclosure levels for the entities that have adopted IFRS for SMEs fall short. The logistic regression results indicated that the adoption level of IFRS for SMEs is significantly influenced by inhibitors (p = 0.049) and size (p = 0.012). It was also discovered that the relationship between adoption inhibitors and adoption level was mediated by size. | ||
| Keywords | ||
| International Financial Reporting Standards; Financial Reports; and SMEs | ||
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