A review of the current debate on the determinants and consequences of mandatory IFRS adoption

Noor Houqe

International Journal of Accounting & Information Management, 2018, vol. 26, issue 3, 413-442

Abstract: Purpose - This paper aims to analyze the economic and financial reporting consequences of International Financial Reporting Standards (IFRS) adoption. Design/methodology/approach - Literature review. Findings - The survey of the IFRS adoption literature shows that the implementation of IFRS has been successful in reducing information asymmetry, improving the quality of information for users, enhancing transparency and comparability and positively influencing capital markets. In general, the positive effects of IFRS are associated with firms in strong enforcement regimes that have incentives to comply. The survey find enforcement of IFRS to be a recurring theme throughout the literature reviewed and is therefore an area which requires development. Practical implications - In particular, there is a need to develop a mechanism for the enforcement of accounting standards internationally. Hence, there is a need for collaboration between the International Accounting Standards Board and regulatory bodies around the world to maximize the effectiveness of international accounting standards. Originality/value - Given the considerable discussion about mandating IFRS for US firms by the Securities and Exchange Commission, this study’s results are both important and well-timed.

Keywords: Enforcement; Accounting conservatism; Earnings management; IFRS adoption; Capital market effects; Firm performance (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijaimp:ijaim-03-2017-0034

DOI: 10.1108/IJAIM-03-2017-0034

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