Foreign Direct Investments and International Financial Reporting Standards Adoption in Africa
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Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City,
Abstract
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This study examines the relationship between Foreign
Direct Investments (FDI) and International Financial
Reporting Standards (IFRS) adoption in Africa. Data were
collected from Forty-six countries in Africa out of the fifty
four countries making up the African continent; where it
was reported in extant literature that only 54% of African
countries have adopted the IFRS product. The Ordered
Logistic Regression (OLR) technique under theE-view 7.0
software was used to analyse the data collected. The
study reveals that foreign direct investment has a positive
but not significant relationship with adoption of IFRS in
Africa. This not significant relationship is attributable to
the scanty flow of FDI to Africa. Based on this result, it
was recommended that policy effort should be put in
place to enhance the flow of foreign direct investment into
the African economy, may be by creating an enabling
environment free from corruption and inadequate
security of life and properties. More of this will stir
economic/ capital market growth and deepen the need to
practice or adopt the International Financial Reporting
Standards (IFRS) in Africa
Keywords
HF5601 Accounting