Regional Mandate and Institutional Pressures in the Adoption of IFRS and IFRS for SMEs: Evidence from West Africa

Abstract

This study examines two distinct forces behind the adoption of international accounting standards by West African countries. We treat the 2019 OHADA mandate as the regional force and use the three pressures of institutional theory to proxy for country-level factors. Examining 16 countries over 2009–2022, we do not find support for coercive or mimetic pressures, though the proxies for these two constructs are indirect. The findings support a significant role for normative pressures and, most strongly, for the 2019 OHADA mandate. The concentration of IFRS adoption among common-law countries, documented in prior research, does not persist after the mandate. Nine civil-law countries in the region adopted IFRS in 2019. In short, the 2019 OHADA mandate and country-level normative pressure are the two determinants of IFRS adoption we document in West Africa. For IFRS for SMEs, we find that none of the institutional theory pressures is associated with adoption; instead, the strongest predictor is a country’s adoption of full IFRS.