THE ADOPTION OF IFRS AND AUDITOR SWITCHING: A CASE OF GHANAIAN LISTED COMPANIES

ABSTRACT Given the growing levels of corporations through international trade and the significant changes global economies have seen over the last few years have resulted in significant changes in business operations world over. Prominent among such changes the financial sector has witness is the adoption of International Financial Reporting Standards (IFRS). The purpose of the study was to examine the extent of compliance with IFRS by Ghanaian companies, its association with auditor switching and the effects of auditor switching on listed companies’ operating in the Kumasi Metropolis. The study employed quantitative approach using structured questionnaire. The target population of the study included staffs and management of the 28 companies listed on the GSE that are operating in the Kumasi Metropolis. In all 104 respondents out of a sample size of 112 individuals participated in the study giving a response rate of 92.9%. Data collected was analysed using the Statistical Package for Social Sciences (SPSS Version 20.). Analysis employed descriptive and inferential statistics which included measures of dispersion and factor analysis. From the analysis of the data collected it was observed that, the level of compliance among listed companies is relatively low. The study further observed that, the rationale behind the switch in auditors as results of IFRSs adoption were observed to be unaffordable audit fees, demand by shareholders, poor quality of audit service, auditor's lack of knowledge in IFRSs, there was change in management, reported disputes occurred, unqualified opinion was not received and to reduce cost of operations. The study therefore concludes that IFRSs adoption results in auditor switching among listed companies.