‘Does accounting regulation matter?’: An experience of international financial reporting standards implementation in an emerging country (original) (raw)
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IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS: SOME REGULATORY ISSUES
Globalization forces countries to open their market for foreign investors. As business crosses the boundaries, there arises a need for some commonly accepted and applicable financial reporting standards for the companies. Now as the world globalize, it has become imperative for India to make a format strategy for convergence with IFRS with the objective to harmonize with globally accepted accounting standards. But to cope with convergence of Indian accounting standards with IFRS, we need to address several regulatory and institutional issues which might impede smooth transition to IFRS. This paper is an attempt to explore the regulatory and institutional issues needing immediate attention of policy makers and to make some recommendation to withstand this challenge.
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This longitudinal study investigates the impact of cultural factors on the implementation of global accounting standards (IFRS) in Bangladesh (a country with very different cultural values and governance systems in comparison to other developing countries, for example, the absence of mature democracy from its birth). Building on institutional theory, two rounds of in-depth interviews (2010 & 2011) are conducted; 1647 enforcement documents (1998-2010) and 332 court cases (1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010) are evaluated. The study contributes to the literature on socio-cultural factors regarding IFRS implementation in developing countries. The study confirms the pressures of coercive, mimetic and normative institutional isomorphism for the pursuit of legitimacy via social expectations. Contrary to prior research, a lack of enforcement and a high level of corruption are found during the periods of democratic government. The study has raised a serious question to the international policymakers (e.g., the IMF and World Bank) for the suitability of global accounting standards in developing countries.