Non-compliance and Challenges of Implementing IFRS in Saving and Credits Cooperative Societies (SACCOS) in Shinyanga Region – Tanzania

Abstract

This study investigated the extent of IFRS compliance and challenges face SACCOS in compliance with IFRS in Tanzania particularly in Shinyanga region. The study was motivated by fact that, since 2004 when Tanzania adopted IFRS to date, cooperative stakeholders are complaining on inability of SACCOS to comply with IFRS. The study used a case study design whereby seven SACCOS were selected from Shinyanga Urban and three SACCOS were selected from Shinyanga Rural, making a total of ten SACCOS surveyed by the study. A total of 80 respondents were selected with each SACCOS being represented by eight respondents. The findings show that there is a high rate of noncompliance of IFRS in SACCOS. Some of the challenges hindering SACCOS to comply with IFRS include; lack of professional accountants, lack of awareness on IFRS requirements, poor legal support, financial constraints and complexity of IFRS. To overcome these challenges, the study recommends the following: the NBAA should establish an awareness programme on IFRS, empower COASCO to conduct monitoring activities on IFRS compliance in SACCOS and encourage SACCOS to employ professional accountants. On other hand, training institutions like MUCCoBS should prepare manuals on IFRS compliance in SACCOS to help SACCOS’ staff and members to be conversant with IFRS. Furthermore, the government should establish a legal framework which compels SACCOS to comply with IFRS.