CONSEQUENCES AND MOTIVATIONS OF ADOPTING IFRS: PERCEPTIONS REGARDING INSTITUTIONAL FACTORS

Glavan Roxana Florina
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Glavan Roxana Florina: Western University of Timisoara, Doctoral School of Economics and Business Administration, Timisoara, Romania

Annals - Economy Series, 2019, vol. 5, 155-161

Abstract: The objective of this study is to grasp the perception of the financial directors of Romanian companies quoted on the economic benefits of adopting IFRS and of the institutional factors that might affect their manifestation. Results have shown that most financial directors consider that adopting IFRS could improve the quality of financial reporting through an increased international comparability and the orientation towards actualized values. In Romania, IFRS standards (International Financial Reporting Standards) are mostly applied as a follow up of respecting EU imposed requests on member countries, the local context being characterized by specific institutional factors, such as an undercapitalized stock exchange with reduced liquidity, the predominant banking financing of entities, the connection of accounting to taxation policy and the poor quality of corporative government. Recent research has shown that the benefits of adopting IFRS largely depend on the motivations that lie behind its application, but also the local context in which they are applied.The finance directors identified structural institutional factors (such as the double accounting system operating in Romania, or the capital market inefficiency) that are expected to limit the potential economic benefits for the capital market that can be derived from accounting information conforming to IFRS, regardless of its qualitative characteristics.

Keywords: adopting IFRS; motivations; economic benefits; institutional factors (search for similar items in EconPapers)
Date: 2019
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