The effects of accounting ethics on the quality of financial reports of rural banks in Ghana _ a study of Nwabiagya rural bank and Adansi rural bank limited

Abstract

The main objective of the study was to evaluate the effects of accounting ethics on the quality of financial reports of rural banks in Ghana - a case study of Nwabiagya Rural Bank and Adansi Rural Bank Limited. The researcher used descriptive research design for the study. Quantitative research approach was used. The population includes branch managers, accountants, internal auditors and external auditors at Nwabiagya Rural Bank and Adansi Rural Bank Limited. The purposive sampling technique was used to select all the fifty (50) participants for the study. Questionnaire was the main instrument used to gather primary data. The statistical package for social scientist (SPSS version 20) was used to analyze the pre-coded questions. The study results concluded that due to the diverse range of accounting services and recent corporate collapses, attention has been drawn to ethical standards accepted within the NRB and ARBL. Also, to combat the criticism and prevent fraudulent accounting, the NRB and ARBL have developed regulations and remedies for improved ethics among the accounting profession. The outcome of compliance with IFRS on value relevance of accounting information ethics of the two rural banks led to disclosures of forward- looking information in annual reports, and the use of fair value as measurement basis. The high ethical standards promoted financial reporting quality and improved adherence to high ethical standards that helps boost the integrity of financial statements of the selected rural banks. The study recommends that the accounting standards setting bodies in Ghana should support the effort to ensure improved compliance with IFRS in the two selected rural banks as a matter of policy. This should be done by organising compulsory regular training and re-training programmes for management and staff of the two selected rural banks on importance as well as need to observe all the mandatory disclosure requirements of IFRS.