Ghana Adopts International Financial Reporting Standard

Accra, Jan. 23, GNA - Ghana on Tuesday entered a new accounting and reporting era by formally adopting the use of the stringent International Financial Reporting Standards (IFRS) in the preparation and reporting of financial information.

Consequently, the Ghana National Accounting Standards published by the Institute of Chartered Accountants, Ghana (ICAG) and which had been in use since 1993 is to be gradually phased out by 2009.

The implementation of the IFRS would commence immediately with listed companies; government business enterprises; Banks; Insurance companies; securities brokers; pension funds and investment bankers and public utilities, which are all expected to use the IFRS standards in meeting their reporting deadline of December 31, 2007.

However, Small and Medium Scale Enterprises (SMEs); State-Owned Enterprises (SOEs), Ministries, Departments and Agencies would be given a transitional period of two years to enable them to begin the use of IFRS by 2009.

Mr Kwadwo Baah-Wiredu, who launched the IFRS, said the move would enable financial reports from businesses in the country to be well understood and accepted globally.

He said there was the compelling need to migrate to the international standard because of various weaknesses in the Ghana National Accounting Standards compared with the international equivalents.

Besides, the migration to IFRS would enable investors to track performance of companies, especially those on the stock exchange and enable them to make investment decisions.

Mr Baah-Wiredu said the IFRS would enhance transparency and accountability in both the private and public sectors as well as keep the public interest in view.

Dr Paul Acquah, Governor of the Bank of Ghana, lauded the initiative and said the collapse of Enron; WorldCom and other high profile accounting failures was a clear demonstration of the importance of reporting reliable financial information.

Mr Bright Obeng Boampong, Chairman, Technical and Research 96 ICAG, said the use of the international standard would make it easier for financial information from Ghanaian companies to be compared with those of their peers in other parts of the world.

In addition, it would boost investor confidence in the financial reporting and open the way for foreign investment flows.

Nana Professor Ato Ghartey, President ICAG, said top management should be involved in the implementation of IFRS to ensure its success.