Cross border trade, which thrives on the active participation of investors, is a dominant feature of globalisation. International diversity in accounting standards, however, creates information asymmetry, which increases the cost of raising funds and monitoring managers. Empirical evidences point to the fact that adoption of International Financial Reporting Standards is a panacea for reducing information asymmetry. This study examines the relevance of IFRS in addressing cross border accounting challenges. It was hypothesized that adoption of International Financial Reporting Standards (IFRS) in some African Countries (South Africa, Nigeria, Ghana, Kenya and Sierra Leone)would promote Foreign Direct Investment (as a proxy for optimal investment decision) as it reduces information processing costs for foreign investors. Descriptive analysis of secondary data on Foreign Direct Investment from 2005 to 2013 obtained from World Bankwas carried out. The result of the Pearson correlation 2- tailed test showed that there was no significant correlation between or among the selected countries.Using year 2012 (where adoption of IFRS cut across the countries) it was found out that the net inflow of Foreign Direct Investment to Ghana, Nigeria and Sierra Leone dropped by 2.05%, 21.01% and 35.99% respectively thereby invalidating the initial assumption that adoption of IFRS would boost Foreign Direct Investments. Meanwhile, Foreign Direct Investment to South Africa and Kenya grew by 75.49% and 98.91% respectively. Further research is required to unravel the factors that are responsible for decline in inflow of Foreign Direct Investment to Ghana, Nigeria and Sierra Leone in spite of adoption of IFRS.
