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“International Financial Reporting Standards” (IFRS) is an act on accounting standards to provide clarity, relevance, reliability and comparability to financial statements. It provides a global standard rule to make entries regarding different types and events of financial transactions reported to the financial statement properly. In this research IFRS implementation regarding issues would be identified.
Financial accounting in companies and countries are dependent on various rules and standards where implementation of IFRS could set proper standard rules for financial reports. However, in different countries implementation of IFRS has faced difficulties due to complexity of principle. According to Tsalavoutas et al. (2020), different approval principles are not implemented in corporate organization because of lack of adequate guidance. Along with that, issuers capture different accounting guidance of IFRS. through quality of governance institutions are relatively higher performance compared to IFRS. cultural and political differences of countries provide significant obstacles toward progress toward a single global financial communication system.
The purpose of research is to identify difficulties in implementing IFRS. Due to accounting guidelines of IFRS, the global accounting system could be dragged to one standard rule for each country and company. In recent years development of IFRS has dragged developed countries whereas developing countries have been ignored by IFRS (Gao, 2022). Economic development of countries has been dependent on the accounting system to mitigate the financial crisis. In this research developing counting has been ignored by IFRS that alops creates difficulties to follow IFRS in major countries and companies. Lack of qualified professionals and preparedness are major challenges to adoption of IFRS.
Research questions have been established to define the outcome of the research. Major section would focus on those particular points.
Research objectives would help to make adequate research on IFRS. Along with complexity and lack of knowlce.
IFRS is the stratedard accounting guideline for particular financial transactions and events related eports to financial statements. IFRS is developed and maintained by the “Irnternational Accounting Standards Board '' (IASB) (Wahyuni et al. 2020). Objective of IFRS to provide adequate financial statements to investors to understand about countries and listed companies performance. Moreover, IFRS is being used by more than 100 countries including the European Union and G20 countries. However, underdeveloped countries have been ignored by IFRS due to lack of resources for implementations. In 2008, the US securities council described a road map possessible path to set single accounting rules for global. Corporate organizations ignored IFRS for accounting due to higher costs involved with it.
Corporate organization preceding the accounting standard rule for reporting financial transactions. However, adoption of different accounting systems makes a difference in different countries' accounting systems. Moreover, unlisted companies are not interested to imp;lrneting IFRS due to the huge cost requirement. Although lack of knowledge of accounting professionals also impacts on financial reports negatively. IFRS standard protocol has been involved with those facts that make it an obligation to adopt IFRS in corporate organizations. Different organization are being involved to present financial reports at the end of financial years, where micro organisations could not carry this financial cost to adoption of IFRS (Hameedi et al. 2021). additional information is GAAP and IFRS rules have some differences which create lackl education regarding IFRS.
Countries economic condition has been identified by financial rtep[orts where GAAP and IFRS differences impact on fair value measurement. Although legal considerations regarding accounting rules are different from GAAP, it also creates some challenges for countries' actual growth or deficit finding (Mohsin et al. 2021). Through adoption of IFRS, countries' financial accounting would differ on taxation calculation and collection. Along with companies, accounting g s system would create issues to tally accounting records. Using different rules in accounting reports could change actual output to investors, which would mislead investors for future investment.
Secondary data collection method has been chosen in this research to identify the impact of IFRS to companies and countries. Data will be derived from financial reports of companies to identify the impact of IFRS in accounting practice. Alothrough, listed companies in the stock exchange would be chosen to present the impact of IFRS adoption. The information regarding impact of IFRS to countries would be identified by export and import related data (Key and Kim, 2020). Additional investment on companies is also being used to identify the approach of investors regarding IFRS adoption. Main stream of data would be collected from the public domain which is not needed to provide ethical approvals.
Collective data from from different source would be analysis through quantitative analysis. Through qualitative data analysis process descriptive analysis to understand about progress of IFRS in developing countries as well as developing countries (Akisik et al. 2020). Stakeholders such as investors approach companies, which are adopting IFRS also being identified for a better accounting system. ROA, ROE and book value of organization would be identified to establish relation of IFRS adoption in accounting practice.
Research significant is to identify the effect of IFRS implementation. Financial performance of organisations also being identified to understand adoption of IFRS impact of financial condition.
As per study requirement implementation of IFRS implementation regarding issues in countries and organisations has based on larger data collection. The limitation of study is size of data to identify effects on financial conditions. Performance analysis of one countries might not provide a wider view of IFRS issues.
Akisik, O., Gal, G. and Mangaliso, M.P., 2020. IFRS, FDI, economic growth and human development: The experience of Anglophone and Francophone African countries. Emerging Markets Review, 45, p.100725.
Gao, J., 2022. Research on Earnings Management under IFRS Framework. International Journal of Science and Research (IJSR), 11, pp.1617-1622.
Hameedi, K.S., Al-Fatlawi, Q.A., Ali, M.N. and Almagtome, A.H., 2021. Financial performance reporting, IFRS implementation, and accounting information: Evidence from Iraqi banking sector. The Journal of Asian Finance, Economics and Business, 8(3), pp.1083-1094.
Key, K.G. and Kim, J.Y., 2020. IFRS and accounting quality: Additional evidence from Korea. Journal of International Accounting, Auditing and Taxation, 39, p.100306.
Mohsin, M., Nurunnabi, M., Zhang, J., Sun, H., Iqbal, N., Iram, R. and Abbas, Q., 2021. The evaluation of efficiency and value addition of IFRS endorsement towards earnings timeliness disclosure. International Journal of Finance & Economics, 26(2), pp.1793-1807.
Tsalavoutas, I., Tsoligkas, F. and Evans, L., 2020. Compliance with IFRS mandatory disclosure requirements: a structured literature review. Journal of International Accounting, Auditing and Taxation, 40, p.100338.
Wahyuni, E.T., Puspitasari, G. and Puspitasari, E., 2020. Has IFRS improved accounting quality in Indonesia? A Systematic Literature Review of 2010-2016. Journal of Accounting and Investment, 21(1), pp.19-44.
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