Literature suggests that countries should adopt the International Financial Reporting Standards and the worldwide recommended narrative reporting in annual reports. However, in developing countries, a range of prerequisites have to be put in place to ensure compliance therewith. This study has two main aims: firstly, to identify the way Rwandan companies report and to compare their reporting system with international requirements, and secondly to establish how aware Rwandan companies are of narrative reporting. This study uses a basic research and a mixed methods approach. A mixed method approach is used when the researcher supplements qualitative information with a quantitative approach to provide a more comprehensive analysis of the problem. A sample of 24 companies formed the subject of this study. Data were collected using a questionnaire which was supplemented in some cases with interviews. This study revealed that although Rwandan companies report annually, they do not all comply with International Financial Reporting Standards. While Rwandan companies do not totally ignore narrative reporting and are aware of its importance, some preparers lack some knowledge towards the preparation and presentation of such reports. Some of the reasons for this were the lack of a properly constituted accounting board, the lack of sound regulation in the accounting profession and the absence of enough qualified accountants Based on the current study’s findings, it is recommended that the accounting profession in Rwanda should be strengthened. This can be achieved with the help of the government of Rwanda and the international community. The current study also revealed the necessity for Rwanda to adopt the International Financial Reporting Standards. To achieve this, an incremental adoption approach is recommended which could lead the way to the full adoption of the International Financial Reporting Standards. / Thesis (M.Acc.)-University of KwaZulu-Natal, Westville, 2009.