The consequences of non-compliance with Accounting standards on the quality of financial reporting for companies listed on Zimbabwe Stock Exchange.

Author

Dombo, Nyasha

Title

The consequences of non-compliance with Accounting standards on the quality of financial reporting for companies listed on Zimbabwe Stock Exchange.

Abstract

This study aims to investigate the consequences of noncompliance with international accounting standards on the quality of financial reports. The objectives of the study were to determine how non-compliance with international accounting standards affects the quality of financial reports, to compare qualitative characteristics of listed companies’ financial practices against IFRS disclosures, to explore challenges in complying with IFRS and IAS to identify the best compliance practice for compliance with IFRS and IAS. The study uses resource-based theory as a theoretical framework and adopts a descriptive research design, with purposive sampling of 65 Zimbabwe Stock Exchange listed companies. The research instruments used were questionnaires and financial information from the companies, analyzed using both qualitative and quantitative methods. The findings indicate that the main challenge for IFRS/IAS compliance is driven by economic challenges in Zimbabwe and a turbulent environment. The difficulty in managing the financial records in hyperinflationary conditions and parallel market dominance lead to difficulties in the financial reporting of the companies regarding IFRS/IAS demands. The study concludes that noncompliance with IFRS/IAS negatively affects the quality of financial reporting and that there is a positive correlation between IFRS/IAS requirements and the financial statements of ZSE listed companies. The study recommends that the ZSE should focus on sustainability accounting standards and GRI reporting framework to include non-financial information in financial reports. Additionally, policymakers should include rewards and punishments for noncompliance in their policies and lobby with the government for flexibility in hyperinflationary conditions to ensure accurate financial reporting for all ZSE listed companies.

Date

2023

Publisher

BUSE

Keywords

Accounting standards

Financial reporting

Supervisor

N/A

Item sets

Department of Accountancy

Media

The consequences of non-compliance with Accounting standards on the quality of financial reporting for companies listed on Zimbabwe Stock Exchange.

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