Title: International Financial Reporting Standards adoption in Ethiopia: testing a mediation model

Authors: Azime Hassen; Gollagari Ramakrishna

Addresses: Department of Public Financial Management, Ethiopian Civil Service University, Addis Ababa, Ethiopia ' Department of Public Financial Management, Ethiopian Civil Service University, Addis Ababa, Ethiopia

Abstract: This study investigates the mediation impact of perceived usefulness on the relationship between perceived familiarity, perceived risk and adoption of International Financial Reporting Standards (IFRS) in Ethiopia. The constructs are developed on the basis of technology adoption model (TAM) and theory of planned behaviour (TPB) model. The data are collected from primary sources using questionnaire survey and key informant interview. The analysis is based on the survey data of 243 academics and financial experts. The contribution of this study lies in verifying the meditational impact of perceived usefulness; and the impact of risk along with perceived familiarity on IFRS adoption which was not attempted earlier. Construct validity is verified using confirmatory factor analysis (CFA); mediation analysis is attempted using GLM procedure in Jamovi software. The findings reveal that IFRS adoption depends on the perceptions of the users in terms of familiarity, usefulness and the risk involved; and perceived usefulness had a partial mediation impact on the relationship between familiarity and adoption similarly, between perceived risk and adoption though, perceived risk had a negative impact on perceived usefulness.

Keywords: adoption of IFRS; perceived familiarity; perceived usefulness; perceived risk; mediation; Ethiopia.

DOI: 10.1504/AJAAF.2020.111738

African Journal of Accounting, Auditing and Finance, 2020 Vol.7 No.2, pp.172 - 186

Received: 24 Apr 2020
Accepted: 14 Jul 2020

Published online: 11 Dec 2020 *

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