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A project submitted to the Department of Accounting

IFRS Adoption and the Quality of Financial Reporting Among SMEs

By

Daniel Mwangi

U/2014/ABC/0205

In partial fulfilment of the requirements for the award of a Bachelor's degree

Supervisor: Prof. K. O. Mensah

2024

Abstract

This project assesses the impact of IFRS (and IFRS for SMEs) adoption on the quality of financial reporting among small and medium enterprises. It compares reporting quality indicators — timeliness, comparability and disclosure completeness — before and after adoption, and identifies the cost and capacity barriers SMEs face in compliance. The study is organised into five chapters covering the introduction, review of related literature, research methodology, data presentation and analysis, and the summary, conclusion and recommendations.

Table of Contents

Chapter One: Introduction

  1. 1.1 Background to the Study4
  2. 1.2 Statement of the Problem6
  3. 1.3 Aim and Objectives of the Study8
  4. 1.4 Research Questions10
  5. 1.5 Research Hypotheses12
  6. 1.6 Scope of the Study14
  7. 1.7 Limitations of the Study16
  8. 1.8 Operational Definition of Terms18

Chapter Two: Literature Review

  1. 2.1 Conceptual Review16
  2. 2.2 Theoretical Framework18
  3. 2.3 Empirical Review of Related Studies20
  4. 2.4 Gap in Literature22
  5. 2.5 Summary of Literature Review24

Chapter Three: Research Methodology

  1. 3.1 Research Design28
  2. 3.2 Area of the Study30
  3. 3.3 Population of the Study32
  4. 3.4 Sample and Sampling Technique34
  5. 3.5 Instrument for Data Collection36
  6. 3.6 Validity and Reliability of the Instrument38
  7. 3.7 Method of Data Collection40
  8. 3.8 Method of Data Analysis42

Chapter Four: Data Presentation and Analysis

  1. 4.1 Data Presentation40
  2. 4.2 Test of Hypotheses42
  3. 4.3 Discussion of Findings44

Chapter Five: Summary, Conclusion and Recommendations

  1. 5.1 Summary of Findings52
  2. 5.2 Conclusion54
  3. 5.3 Recommendations56
  4. 5.4 Suggestions for Further Studies58

References

Appendices

Final YearPreview only

Chapter One: Introduction

1.1 Background to the Study

This project assesses the impact of IFRS (and IFRS for SMEs) adoption on the quality of financial reporting among small and medium enterprises. It compares reporting quality indicators — timeliness, comparability and disclosure completeness — before and after adoption, and identifies the cost and capacity barriers SMEs face in compliance.

1.2 Statement of the Problem

Assesses whether IFRS adoption has improved the quality of financial reporting among small and medium enterprises. Existing approaches remain limited in reach, accuracy and ease of use, which creates the gap this study addresses.

1.3 Aim and Objectives

The aim of this study is to ifrs adoption and the quality of financial reporting among smes. The specific objectives are to:

  1. review existing literature and systems related to the study;
  2. collect and analyse data using Comparative analysis;
  3. evaluate the results against the stated problem;
  4. make recommendations for practice and further research.

1.4 Scope of the Study

Introduction: background to IFRS adoption by SMEs, statement of the problem (SME financial reports are often unreliable, limiting their access to credit and investment), aim and objectives, research questions, scope, significance of the study, and definition of terms.

Chapter Two: Literature Review

Literature Review: theoretical framework, review of related works on IFRS adoption by SMEs, gaps in existing studies, and a summary positioning this project. Literature Review: theoretical framework, review of related works on IFRS adoption by SMEs, gaps in existing studies, and a summary positioning this project.

Chapters 2–5 are not part of this preview.