Do Common Features Exist Among Countries That Locally Adopt IFRS?

Abstract

Although International Financial Reporting Standards (IFRS) have clearly emerged as the preferred global accounting standard, previous studies of IFRS have mainly focused on post-adoption outcomes. The few IFRS adoption-focused studies are either limited in scope or are based on outdated versions of IFRS.  This paper fills these holes in the literature by offering a comprehensive analysis of IFRS adoption: first, through an expanded classification system which includes local adoption as a distinct form of IFRS adoption and then through ANOVA, discriminant analyses and regression analyses. Several variables were identified as significant drivers of adoption status, one being the Asian region which consistently emerged as a powerful driver of adoption type suggesting previous analysis of IFRS diffusion is incomplete, missing this key region variable. This expanded typology suggests that the system of country classification of required/not required currently used is inadequate in capturing how IFRS is adopted in practice.