The Effect of Organizational Factors on Adopting of International Financial Reporting Standards (IFRS) In Libyan Firms

Abstract

International Financial Reporting Standards (IFRS) is a way of reporting financial results for companies. Most of previous studies were conducted in European Union (EU) and focused on macroeconomic performance of multiple countries. The purpose of this study is to examine the organizational predictors and the consequence of adopting IFRS on the organizational level in Libya. The study reviewed the literature and in particular the Technology-Organization-Environment (TOE) framework to develop the conceptual framework of this study. The study proposed that organizational factors (accounting capabilities, top management support, and organizational readiness) will affect the adoption of IFRS which in turn will affect the organizational performance of accounting companies in Libya. The population of this study is the accounting companies in Libya represented by accountants in these companies. The data was collected using a questionnaire and analyzed using SPSS and AMOS. The findings showed that the organizational factors is important construct. The accounting capabilities are the most important components in the organizational factors followed by the top management support. Organizational readiness did not affect the adoption of IFRS. Adoption of IFRS has a positive effect on organizational performance. Decision-makers are advised to conduct training to enhance the accounting capabilities of the personnel in the Libya accounting companies. They are also advised to adopt the IFRS because it has a positive impact on the organizational performance of the Libyan companies.

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