What effect does the mandatory adoption of IFRS have on the decision to withdraw an IPO?

Manal Alidarous

Asia-Pacific Journal of Accounting & Economics, 2025, vol. 32, issue 6, 1123-1154

Abstract: This article fills a gap in accounting disclosure discipline and Initial Public Offerings (IPOs) withdrawal research by examining how mandating IFRS affects IPO withdrawal. This study is the first to examine more than 33,000 worldwide IPOs that were either unsuccessful or successful from 1995 to 2019 in a variety of countries with varying legislative, cultural, and economic environments. We discovered solid evidence that International Financial Reporting Standards (IFRS) standards reduced IPO withdrawal rates. Mandating IFRS before an IPO reduces information asymmetry and reduces the risk of IPO withdrawal for IPO founders. This suggests that mandatory IFRS adoption reduces IPO withdrawals due to many variables. Reduced IPO information asymmetry improves transparency, investor trust, market efficiency, comparability, and liquidity, outweighing any drawbacks. New firms, investors, scholars, and legislators could capitalize on the results of our research.

Date: 2025
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DOI: 10.1080/16081625.2024.2387577

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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