International Financial Reporting Standards IFRS and the reasons for its adoption in developing countries: A Literature Review
Abstract
The study aims to identify the reasons for the global trend to adopt international financial reporting standards, as the stage of adopting international financial reporting standards is an important stage for interested parties. Therefore, the research goal focuses on studying the mechanisms to be adopted in countries whose financial markets are inactive, which increases the difficulty of adopting standards. Financial reporting for the first time in light of the lack of prior adoption of international financial accounting standards in it and the adoption of these countries on local standards that are not updated in accordance with international financial accounting standards, by studying the accounting literature that transact with the topic of research, and the study reached a conclusion that the adoption of financial reporting standards International IFRS contributes directly to the process of selecting accounting policies, which is positively reflected in the process of standardization and harmonization of accounting principles applied locally in developing countries; They must be international, which makes them generally accepted international accounting principles. The adoption of international financial reporting standards also contributes to a positive impact on the way of interpreting the financial statements.
References
1. Al-Ani, S., & FLAYYIH, H. (2018). Principles of Financial Accounting. Al-Mihajat Printing and Reproduction Office. Baghdad, Iraq.
2. Alappatt, T. M. (2020). Impact of Adoption of International Financial Reporting Standards and Financial Crisis on Accounting Quality of Australian Listed Companies (Doctoral dissertation, Curtin University).
3. Al-Azmi, Yusef Arshid Habib (2013) “Deficiencies in the Application of International Standards for Preparing Financial Reports and Their Impact on the Quality of Disclosure in Financial Statements in the Oil Sector, Master Thesis, Middle East University, Amman
4. Al-Hamashi, Imad Abdul-Hassan Jiyad (2012) “The Impact of Applying International Financial Reporting Standard No. (1) on the Audit Process: An Applied Study in The United Investment Bank Council of the Higher Institute for Accounting and Financial Studies - University of Baghdad
5. Alon & Dwyer، A.، P. (2014). "Early adoption of IFRS as ،a strategic response to transnational and local influences." 348-370.، 49(3)،The International Journal of Accounting
6. Al-Orabi, Hamza. 2013). International accounting standards and the Algerian environment: requirements for compliance and application (PhD thesis.
7. Al-taie, B.F., & Flayyih, H.H., (2020). Intermediate Accounting. Al-Mihajat Printing and Reproduction Office. Baghdad, Iraq.
8. AL-Timemi, A. H & Flayyih, H.H., (2013). Using Benford’s law to detecting earnings management Application on a sample of listed companies in the Iraqi market for securities. journal of Economics And Administrative Sciences, 19(73).
9. Amal, Takhoni (2019) “Accounting practice between the requirements of the SCF financial accounting system and the international accounting variables IAS / IFRS, a thesis presented within the requirements for obtaining a PhD at the University of Batna, Algeria
10. Belkaoui, A. (2017). The context of the contemporary accounting profession. Advances in Public Interest Accounting,
11. Belqawi, Ahmed Riahi (2004) An Accounting Theory. Translated by Riyadh Al-Abdullah and Talal Al-Jajawi, Dar Al-Yazouri, Jordan
12. Ben Tommy, & Badra. (2013) The Effects of Applying International Accounting Standards (IAS / IFR) on Presentation and Disclosure in the Financial Statements of Islamic Banks: An Applied Study (Doctoral dissertation).
13. Bohusova H., 2007, The Possible Ways to IFRS (International Financial Reporting Standards) for Micro-Entities Development (an Investigation of usefulness), MIBE
14. Cheung, E., & Lau, J. (2016). Readability of Notes to the Financial
Statements and the Adoption of IFRS. Australian Accounting
Review, 26(2), 162-176.
15. Clements, C. E., Neill, J. D., & Stovall, O. S. (2010). Cultural diversity, country size, and the IFRS adoption decision. Journal of Applied Business Research (JABR), 26(2).
16. Daske, H., Hail, L., Leuz, C., & Verdi, R. (2008). Mandatory IFRS reporting around the world: Early evidence on the economic consequences. Journal of accounting research, 46(5), 1085-1142
17. De Moura, A. A. F., & Gupta, J. (2019). Mandatory adoption of IFRS in Latin America: A boon or a bias. Journal of International Financial Markets, Institutions and Money, 60, 111-133.
18. Duson., & Robert.,2015” Case Studies in New Revenue
Recognition Guidance", The CAP Journal, Vol. 85, Issue
3, , pp.16-29.
19. Efobi, U. and Nnadi, M. (2015), How Does Foreign Aid Affect the Relationship between IFRS Adoption and Foreign Direct Investment?. African Governance and Development Institute Working Paper Series WP/15/014., [online]
21. Gu, Z., Ng, J., & Tsang, A. (2019). Mandatory IFRS adoption and management forecasts: The impact of enforcement changes. China Journal of Accounting Research, 12(1), 33-61.
22. Haddaweea, A. H., & Flayyihb, H. H. (2020). The Relationship between Bank Deposits and Profitability for Commercial Banks.
23. Hamidat, Jumah (2019) “International Financial Reporting Standards Expert” Arab Society of Certified Accountants: Amman, Jordan 2010
24. Hamidi, Zainab Abbas (2017 "Re-engineering the unified accounting system for banks according to the requirements of the International Financial Reporting Standard (1) Thesis submitted to the Board of the College of Administration and Economics / Al-Mustansiriya University and it is part of the requirements for obtaining a PhD in Accounting
25. Hartmann, B., Marton, J., & Andersson Sols, J. (2020). IFRS in National Regulatory Space: Insights from Sweden. Accounting in Europe, 1-21.
26. Hassan, Ibrahim, Abdullah, S. (2020). University accounting education requirements in light of the trend towards adopting international financial reporting standards (IFRS) "field study in the universities of the Kurdistan Region - Iraq." Journal of the Humanities of the University of Zakho, 8 (3), 440-464.
27. Hussein, Alaa Ali Ahmed (2017) “Suggested accounting models for measuring the mandatory application of IFRSs to profit retention levels and accounting and operational performance of financial contribution companies: an applied study” Journal of Accounting Thought. Ain Shams University - Faculty of Commerce - Accounting and Auditing Department
28. Hussein, Ali Ibrahim. Al-Sakka, Ziad Hashem Al-Sakka. Mahmoud, Saddam Muhammad. (2020). Enhancing financial efficiency under IFRS standards to reduce financial vulnerability / pilot study of the reality of crises in Iraq using data envelope analysis. Tikrit Journal of Management Sciences and Economics, Issue 16 (Special Issue, Part 1).
29. International Federation of Accountants ,HANDBOOK OFINTENATIONAL AUDITING ,ASSURANCE ,AND ETHICS PRONOUNCEMENT ,IFAC publication ,, 2007 , New Yorkp:09
30. Ismail, R. (2017). An Overview of International Financial Reporting Standards (IFRS). International Journal of Engineering Science Invention, 6(5), 15-24
31. Judges, Ahmed Mustafa Abdullah. (2020). The effect of applying international financial reporting standards on the financial performance of Saudi companies. Journal of Economic Additions, 4 (1), 30-51.
32. Khaled Boudaba, The Impact of the Application of the Algerian Financial Accounting System on the Components of the Accounting and Financial Statements of Economic Enterprises, Master Thesis, Higher School of Commerce, 2007 Algeria
33. khdier Abass, Z., Flayyih, H. H., Salih, J. I., & Rahman, N. G. A. (2020). Conceptual Issues in Private information on Lean Accounting: Subject Review.
34. Kolesnik, K., Silska-Gembka, S., &Gierusz, J. (2019). The interpretation of the verbal probability expressions used in the IFRS–The differences observed between Polish and British accounting professionals. Accounting and Management Information Systems, 18(1), 25-49
35. Larson, R. K., & Kenny, S. Y. (1996). Accounting standard-setting strategies and theories of economic development: implications for the adoption of international accounting standards. Advances in International Accounting, 9, 1-20.
36. Leventi, Theodosia, 2009, The impacts of the implementation of International Accounting Standards, MIBES 2009
37. Lotfi, Amin El-Sayed Ahmed (2005) “International Review and the Globalization of Capital Markets”, University Publishing and Distribution House, Alexandria, Egypt.
38. Mahmoud Mohamed, Ahmed Essam (2017). The Impact of Adopting International Financial Reporting Standards on Reducing Accrual-Based Profits Management - A study on companies listed on the Egyptian Stock Exchange. Alexandria Journal of Research, 1 (1), 281-335.
39. Masoud, Sanaa Maher Mohammadi. (2020). Measuring the Impact of Adopting International Financial Reporting Standards on the Quality of Financial Reporting and the Risk of a Stock Price Collapse: An Empirical Study on Companies Listed on the Egyptian Stock Exchange. Accounting Thinking, 24 (3), -370.-381
40. Nobes&Parker , " Comparative International Accounting " 8th ed.Prentice, Hall, 2004
41. Nograni, Ghazi Osman Haji Mahmoud (2016) “Requirements for compliance and application of international accounting and financial reporting standards (IASs-IFRSs) in light of the Iraqi environment Study case - Kurdistan Region as a model. PhD thesis, Salahaddin University, College of Administration and Economics, University of Erbil
42. Opare, S., Houqe, M. N., & van Zijl, T. (2020). IFRS adoption and seasoned equity offering underperformance. Pacific-Basin Finance Journal, 61, 101289.
43. Perera M., 1989, Accounting in developing countries: a case for localized uniformity, British Accounting Review 21
44. Pignatel, I., & Tchuigoua, H. T. (2020). Microfinance institutions and International Financial Reporting Standards: An exploratory analysis. Research in International Business and Finance, 54, 101309
45. Rakesh, H.M. and Shilpa, R, Effect of IFRS and Financial Statements: Implications on FDI and Indian Economy, International Journal of Commerce, .IJCBM) Business and Management , vol. 2, no. 5, 2013
46. Ramanna, K., & Sletten, E. (2009). Why do countries adopt international financial reporting standards?. Harvard Business School Accounting & Management Unit Working Paper, (09-102).
47. Robinson, T. R. (2020). International financial statement analysis. John Wiley & Sons.
48. Ruder, David S. & Canfield, Charles T. & Hollister, Hudson T. "Creation of World Wide Accounting Standards: Convergence and Independence". Journal of International Law & Business،Vol.25, No.3, 2005
49. Safwat, Ali Hafizullah (2017) The Impact of Quality Factors of Accounting Legislation on the Decision to Adopt International Financial Reporting Standards: An Applied Study on a Sample of Companies Listed in the Financial Markets of the Middle East Countries ”, Master Thesis, College of Management and Economics, University of Duhok
50. Saliha, J. I., & Flayyihb, H. H. (2020). Impact of audit quality in reducing external audit profession risks. International Journal of Innovation, Creativity and Change, 13(7), 176-197.
51. Sanabria-García, S., & Garrido-Miralles, P. (2020). Impact of IFRS on non-cross-listed Spanish companies: Financial analysts and volume of trade. European Research on Management and Business Economics.
52. Schroeder, Richard, Martel Clark, Jack Cathy (2006) "The Theory of Accounting", translated by Khaled Ali Ahmad Kajiji, Ibrahim Ould Muhammad Fall, Mars Publishing House, Riyadh
53. SupriadiLaupe, Role of Culture and Law Enforcement in
Determining the Level of IFRS Adoption, European
Research Studies Journal, Volume XXI, Issue 1, 2018, pp.
52 : 64
54. Suryanto, T., Thalassinos, J. E., &Thalassinos, E. I. (2017). Board characteristics, audit committee and audit quality: The case of Indonesia.
55. Thabet, Hassan Thabet and Ibrahim, Laith Khalil (2016) International Financial Reporting Standards, Defect: Diagnostic Tool, IASB, General Accepted Accounting Principles, Tikrit University Journal of Economic and Management Sciences.
56. Thabet, Thabet Hassan, Nasrawi, and Hamed Adel (2020). The role of international accounting standards in reducing the phenomenon of financial corruption in Iraq: obstacles and solutions. Tikrit Journal of Management Sciences and Economics, Issue 16 (Special Issue, Part 1).
57. Tsalavoutas, Ioannis, Fanis Tsoligkas, and Lisa Evans. 2020. "Compliance with IFRS mandatory disclosure requirements: A structured literature review." Journal of International Accounting, Auditing and Taxation 40:100338
58. Yaqoub, Ibtihaj Ismail, Jasim, Abd al-Ridha Nayef, (2018) “Examining the impact of the transition to IFRS on the banking sector in the Iraqi environment from a (qualitative and value) perspective,” Journal of Administration and Economics, Issue 114, Al-Mustansiriya University.
2. Alappatt, T. M. (2020). Impact of Adoption of International Financial Reporting Standards and Financial Crisis on Accounting Quality of Australian Listed Companies (Doctoral dissertation, Curtin University).
3. Al-Azmi, Yusef Arshid Habib (2013) “Deficiencies in the Application of International Standards for Preparing Financial Reports and Their Impact on the Quality of Disclosure in Financial Statements in the Oil Sector, Master Thesis, Middle East University, Amman
4. Al-Hamashi, Imad Abdul-Hassan Jiyad (2012) “The Impact of Applying International Financial Reporting Standard No. (1) on the Audit Process: An Applied Study in The United Investment Bank Council of the Higher Institute for Accounting and Financial Studies - University of Baghdad
5. Alon & Dwyer، A.، P. (2014). "Early adoption of IFRS as ،a strategic response to transnational and local influences." 348-370.، 49(3)،The International Journal of Accounting
6. Al-Orabi, Hamza. 2013). International accounting standards and the Algerian environment: requirements for compliance and application (PhD thesis.
7. Al-taie, B.F., & Flayyih, H.H., (2020). Intermediate Accounting. Al-Mihajat Printing and Reproduction Office. Baghdad, Iraq.
8. AL-Timemi, A. H & Flayyih, H.H., (2013). Using Benford’s law to detecting earnings management Application on a sample of listed companies in the Iraqi market for securities. journal of Economics And Administrative Sciences, 19(73).
9. Amal, Takhoni (2019) “Accounting practice between the requirements of the SCF financial accounting system and the international accounting variables IAS / IFRS, a thesis presented within the requirements for obtaining a PhD at the University of Batna, Algeria
10. Belkaoui, A. (2017). The context of the contemporary accounting profession. Advances in Public Interest Accounting,
11. Belqawi, Ahmed Riahi (2004) An Accounting Theory. Translated by Riyadh Al-Abdullah and Talal Al-Jajawi, Dar Al-Yazouri, Jordan
12. Ben Tommy, & Badra. (2013) The Effects of Applying International Accounting Standards (IAS / IFR) on Presentation and Disclosure in the Financial Statements of Islamic Banks: An Applied Study (Doctoral dissertation).
13. Bohusova H., 2007, The Possible Ways to IFRS (International Financial Reporting Standards) for Micro-Entities Development (an Investigation of usefulness), MIBE
14. Cheung, E., & Lau, J. (2016). Readability of Notes to the Financial
Statements and the Adoption of IFRS. Australian Accounting
Review, 26(2), 162-176.
15. Clements, C. E., Neill, J. D., & Stovall, O. S. (2010). Cultural diversity, country size, and the IFRS adoption decision. Journal of Applied Business Research (JABR), 26(2).
16. Daske, H., Hail, L., Leuz, C., & Verdi, R. (2008). Mandatory IFRS reporting around the world: Early evidence on the economic consequences. Journal of accounting research, 46(5), 1085-1142
17. De Moura, A. A. F., & Gupta, J. (2019). Mandatory adoption of IFRS in Latin America: A boon or a bias. Journal of International Financial Markets, Institutions and Money, 60, 111-133.
18. Duson., & Robert.,2015” Case Studies in New Revenue
Recognition Guidance", The CAP Journal, Vol. 85, Issue
3, , pp.16-29.
19. Efobi, U. and Nnadi, M. (2015), How Does Foreign Aid Affect the Relationship between IFRS Adoption and Foreign Direct Investment?. African Governance and Development Institute Working Paper Series WP/15/014., [online]
21. Gu, Z., Ng, J., & Tsang, A. (2019). Mandatory IFRS adoption and management forecasts: The impact of enforcement changes. China Journal of Accounting Research, 12(1), 33-61.
22. Haddaweea, A. H., & Flayyihb, H. H. (2020). The Relationship between Bank Deposits and Profitability for Commercial Banks.
23. Hamidat, Jumah (2019) “International Financial Reporting Standards Expert” Arab Society of Certified Accountants: Amman, Jordan 2010
24. Hamidi, Zainab Abbas (2017 "Re-engineering the unified accounting system for banks according to the requirements of the International Financial Reporting Standard (1) Thesis submitted to the Board of the College of Administration and Economics / Al-Mustansiriya University and it is part of the requirements for obtaining a PhD in Accounting
25. Hartmann, B., Marton, J., & Andersson Sols, J. (2020). IFRS in National Regulatory Space: Insights from Sweden. Accounting in Europe, 1-21.
26. Hassan, Ibrahim, Abdullah, S. (2020). University accounting education requirements in light of the trend towards adopting international financial reporting standards (IFRS) "field study in the universities of the Kurdistan Region - Iraq." Journal of the Humanities of the University of Zakho, 8 (3), 440-464.
27. Hussein, Alaa Ali Ahmed (2017) “Suggested accounting models for measuring the mandatory application of IFRSs to profit retention levels and accounting and operational performance of financial contribution companies: an applied study” Journal of Accounting Thought. Ain Shams University - Faculty of Commerce - Accounting and Auditing Department
28. Hussein, Ali Ibrahim. Al-Sakka, Ziad Hashem Al-Sakka. Mahmoud, Saddam Muhammad. (2020). Enhancing financial efficiency under IFRS standards to reduce financial vulnerability / pilot study of the reality of crises in Iraq using data envelope analysis. Tikrit Journal of Management Sciences and Economics, Issue 16 (Special Issue, Part 1).
29. International Federation of Accountants ,HANDBOOK OFINTENATIONAL AUDITING ,ASSURANCE ,AND ETHICS PRONOUNCEMENT ,IFAC publication ,, 2007 , New Yorkp:09
30. Ismail, R. (2017). An Overview of International Financial Reporting Standards (IFRS). International Journal of Engineering Science Invention, 6(5), 15-24
31. Judges, Ahmed Mustafa Abdullah. (2020). The effect of applying international financial reporting standards on the financial performance of Saudi companies. Journal of Economic Additions, 4 (1), 30-51.
32. Khaled Boudaba, The Impact of the Application of the Algerian Financial Accounting System on the Components of the Accounting and Financial Statements of Economic Enterprises, Master Thesis, Higher School of Commerce, 2007 Algeria
33. khdier Abass, Z., Flayyih, H. H., Salih, J. I., & Rahman, N. G. A. (2020). Conceptual Issues in Private information on Lean Accounting: Subject Review.
34. Kolesnik, K., Silska-Gembka, S., &Gierusz, J. (2019). The interpretation of the verbal probability expressions used in the IFRS–The differences observed between Polish and British accounting professionals. Accounting and Management Information Systems, 18(1), 25-49
35. Larson, R. K., & Kenny, S. Y. (1996). Accounting standard-setting strategies and theories of economic development: implications for the adoption of international accounting standards. Advances in International Accounting, 9, 1-20.
36. Leventi, Theodosia, 2009, The impacts of the implementation of International Accounting Standards, MIBES 2009
37. Lotfi, Amin El-Sayed Ahmed (2005) “International Review and the Globalization of Capital Markets”, University Publishing and Distribution House, Alexandria, Egypt.
38. Mahmoud Mohamed, Ahmed Essam (2017). The Impact of Adopting International Financial Reporting Standards on Reducing Accrual-Based Profits Management - A study on companies listed on the Egyptian Stock Exchange. Alexandria Journal of Research, 1 (1), 281-335.
39. Masoud, Sanaa Maher Mohammadi. (2020). Measuring the Impact of Adopting International Financial Reporting Standards on the Quality of Financial Reporting and the Risk of a Stock Price Collapse: An Empirical Study on Companies Listed on the Egyptian Stock Exchange. Accounting Thinking, 24 (3), -370.-381
40. Nobes&Parker , " Comparative International Accounting " 8th ed.Prentice, Hall, 2004
41. Nograni, Ghazi Osman Haji Mahmoud (2016) “Requirements for compliance and application of international accounting and financial reporting standards (IASs-IFRSs) in light of the Iraqi environment Study case - Kurdistan Region as a model. PhD thesis, Salahaddin University, College of Administration and Economics, University of Erbil
42. Opare, S., Houqe, M. N., & van Zijl, T. (2020). IFRS adoption and seasoned equity offering underperformance. Pacific-Basin Finance Journal, 61, 101289.
43. Perera M., 1989, Accounting in developing countries: a case for localized uniformity, British Accounting Review 21
44. Pignatel, I., & Tchuigoua, H. T. (2020). Microfinance institutions and International Financial Reporting Standards: An exploratory analysis. Research in International Business and Finance, 54, 101309
45. Rakesh, H.M. and Shilpa, R, Effect of IFRS and Financial Statements: Implications on FDI and Indian Economy, International Journal of Commerce, .IJCBM) Business and Management , vol. 2, no. 5, 2013
46. Ramanna, K., & Sletten, E. (2009). Why do countries adopt international financial reporting standards?. Harvard Business School Accounting & Management Unit Working Paper, (09-102).
47. Robinson, T. R. (2020). International financial statement analysis. John Wiley & Sons.
48. Ruder, David S. & Canfield, Charles T. & Hollister, Hudson T. "Creation of World Wide Accounting Standards: Convergence and Independence". Journal of International Law & Business،Vol.25, No.3, 2005
49. Safwat, Ali Hafizullah (2017) The Impact of Quality Factors of Accounting Legislation on the Decision to Adopt International Financial Reporting Standards: An Applied Study on a Sample of Companies Listed in the Financial Markets of the Middle East Countries ”, Master Thesis, College of Management and Economics, University of Duhok
50. Saliha, J. I., & Flayyihb, H. H. (2020). Impact of audit quality in reducing external audit profession risks. International Journal of Innovation, Creativity and Change, 13(7), 176-197.
51. Sanabria-García, S., & Garrido-Miralles, P. (2020). Impact of IFRS on non-cross-listed Spanish companies: Financial analysts and volume of trade. European Research on Management and Business Economics.
52. Schroeder, Richard, Martel Clark, Jack Cathy (2006) "The Theory of Accounting", translated by Khaled Ali Ahmad Kajiji, Ibrahim Ould Muhammad Fall, Mars Publishing House, Riyadh
53. SupriadiLaupe, Role of Culture and Law Enforcement in
Determining the Level of IFRS Adoption, European
Research Studies Journal, Volume XXI, Issue 1, 2018, pp.
52 : 64
54. Suryanto, T., Thalassinos, J. E., &Thalassinos, E. I. (2017). Board characteristics, audit committee and audit quality: The case of Indonesia.
55. Thabet, Hassan Thabet and Ibrahim, Laith Khalil (2016) International Financial Reporting Standards, Defect: Diagnostic Tool, IASB, General Accepted Accounting Principles, Tikrit University Journal of Economic and Management Sciences.
56. Thabet, Thabet Hassan, Nasrawi, and Hamed Adel (2020). The role of international accounting standards in reducing the phenomenon of financial corruption in Iraq: obstacles and solutions. Tikrit Journal of Management Sciences and Economics, Issue 16 (Special Issue, Part 1).
57. Tsalavoutas, Ioannis, Fanis Tsoligkas, and Lisa Evans. 2020. "Compliance with IFRS mandatory disclosure requirements: A structured literature review." Journal of International Accounting, Auditing and Taxation 40:100338
58. Yaqoub, Ibtihaj Ismail, Jasim, Abd al-Ridha Nayef, (2018) “Examining the impact of the transition to IFRS on the banking sector in the Iraqi environment from a (qualitative and value) perspective,” Journal of Administration and Economics, Issue 114, Al-Mustansiriya University.
Authors
[1]
“International Financial Reporting Standards IFRS and the reasons for its adoption in developing countries: A Literature Review”, Soc. sci. humanities j., vol. 5, no. 04, pp. 2171–2183, Apr. 2021, Accessed: Nov. 23, 2024. [Online]. Available: https://sshjournal.com/index.php/sshj/article/view/695
Copyright and license info is not available