Review of Public Administration and Management

Abstract

Adoption of IFRS as a Strategy for Captial Flight In The Third World Countries

Ude Alexander Onyebuchi

International financial reporting standard (IFRS) is a set of accounting standard that stipulate on how transaction and events should be reported in the financial statement to bring a quality and uniformed set of financial reporting that will help curtailing capital flight in third world countries. Capital flight represents a higher burden in Africa, as a percentage of GDP, than in other regions. The sum that leaves developing countries as unreported outflows amounts to ten times the annual global aid flows, and twice the debt service developing countries pay each year. The capital outflows from Africa and the absorption into western economies deserve attention and require concerted effort. To end the secrecy that enables it, there must be an automatic and multilateral exchange of information between various government authorities, as well as imposition of sanctions on noncompliance, and also the need to require multinational companies to report the profit they make and taxes they pay in each country where they operate which could be mandatory if made part of international financial reporting standard (IFRS). Putting an end to capital flight is an urgent matter of global justice of bringing the billions back to where they were produced and where they should contribute to the welfare of the people.