Investigating micro-level determinants of IFRS for SMEs prospective adoption in emerging economies – evidence from Morocco

Abstract

Purpose This study aims to investigate the determinants influencing the prospective adoption of International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs) in Morocco. Design/methodology/approach Framed within the theoretical lens of Diffusion of Innovations (DoI) theory, the research employs a two-stage methodological approach using a survey of 102 Moroccan SMEs. With Principal Components Analysis, new factors were identified while Logistic regression (Logit) assesses the likelihood of IFRS for SMEs’ adoption, focusing on organizational, professional and innovation-related variables. Findings The study reveals that Moroccan SMEs perceive IFRS for SMEs as insufficiently aligned with their operational realities, offering limited perceived benefits within the local context. While there is a preference for converging with internationally recognized standards, respondents advocate for contextual adaptations to address specific needs. Hypothesis testing suggests that none of the examined factors had a statistically significant impact on the likelihood of IFRS for SMEs’ adoption, except for the facilitating properties of standards. Research limitations/implications This study focuses on a single country, which may limit the generalizability of findings to other contexts. Practical implications The findings underscore the necessity for policymakers to address systemic deficiencies in the existing accounting framework. Additionally, they should shift from passive enablers to active engagement drivers by linking tax incentives to measurable IFRS for SMEs’ adoption milestones rather than providing blanket support. To support a smooth transition, professional bodies should move beyond passive facilitation and adopt a strategic interventionist role – ensuring support fosters engagement rather than complacency. Originality/value This study addresses the underexplored pre-adoption phase, shedding light on micro-level factors pertinent to emerging economies often marginalized in macro-focused studies. It introduces an ex ante perspective to the discourse on IFRS for SMEs’ adoption, contributing to the broader literature on accounting standard adoption in emerging markets and SMEs. It also refines existing DoI models by incorporating novel factors within the innovation and individual categories, thereby enhancing its applicability in similar settings.

Topics & Concepts