Firm-specific characteristics and IFRSs compliance: a study of savings and credit cooperative societies in Tanzania

Abstract

Compliance with International Financial Reporting Standards (IFRSs) has been a subject of scholarly interest in the literature due to its recognised role in influencing the quality of financial reports and enabling users to make informed decisions. However, evidence on the association between firm-specific characteristics and compliance with IFRSs in Tanzanian Savings and Credit Cooperative Societies (SACCOS) is scarce. To address this knowledge gap, this study examines how size, age, category, leverage and liquidity affect compliance with IFRSs in Tanzanian SACCOS. The study employed a quantitative methodology, using panel data regression as the analytical approach. The research utilised eight years (2013 - 2020) of secondary data from 202 SACCOS in Tanzania. The findings reveal that SACCOS size, age, and leverage are positively significantly associated with the extent to which they comply with IFRSs. At the same time, no significant association was found between category, liquidity level, and compliance with IFRSs. The study recommends that policymakers make reforms that will enable SACCOS to improve the quality of financial reports through effective internal governance mechanisms. Also, sector regulatory bodies and accounting standard regulator are recommended to intensify their supervision of SACCOS and establish robust monitoring systems to improve overall SACCOS IFRSs compliance.