Abstract
The adoption of International Financial Reporting Standards (IFRSs) in Europe and around the world represents perhaps the most important accounting regulatory change in recent years. The use of IFRSs as a universal financial reporting language is gaining momentum across the globe as more countries are adopting IFRS or converging their local standards with it. Nigeria has set a road map towards the adoption of IFRS from January, 2012. Although there are arguments that IFRS are irrelevant to developing countries but they are adopting it because IFRS is a product with “network effects”. IFRS is perceived as a high quality accounting standard, compared to most local accounting standards, which can help to foster increased comparability of financial statements by investors. Globalization, increased border-listing, attraction of foreign investment and aids, and other institutional factors have been the motivating factors for IFRS adoption. Though IFRS promises a lot of benefits for financial reporting by adopters, there are many challenges and obstacles which must be overcome. Lessons from already adopters of IFRS reveal that for effective IFRS adoption, there must enabling institutional framework, accounting education and training, efficient capacity building programme to prepare the various stakeholders for the imminent transition and challenges. DOI: 10.5901/mjss.2013.v4n3p389
Highlights
In the past few years, many developed and developing countries have adopted International Financial Reporting Standards (IFRSs) as their basis for financial reporting .The European Union (EU) took the lead when she mandated all listed companies in the European Union to start the adoption and implementation of the IFRS in their financial reporting since 2005
Zeff & Nobes (2009, p178) responding to Thomson (2009) that Australia has definitely adopted IFRSs by argue that “Australian method of implementation is different in major ways from those used in such countries as Israel and South Africa “.Nobes & Zeff (2008) examine the reports by 255 companies and their auditors in four European countries and Australia concerning compliance with IFRS
All listed companies in France, Germany, the Netherlands and the UK and other 21 countries were mandated by the European commission to adopt International Accounting Standards (IASs) or the International Financial Reporting Standards (IFRS) from 2005.The Australian government and standard setter had put up an adoption policy of IAS by 2005.The US roadmap for adoption is 2014-2016
Summary
In the past few years, many developed and developing countries have adopted International Financial Reporting Standards (IFRSs) as their basis for financial reporting .The European Union (EU) took the lead when she mandated all listed companies in the European Union to start the adoption and implementation of the IFRS in their financial reporting since 2005. Zeff & Nobes (2009, p178) responding to Thomson (2009) that Australia has definitely adopted IFRSs by argue that “Australian method of implementation is different in major ways from those used in such countries as Israel and South Africa “.Nobes & Zeff (2008) examine the reports by 255 companies and their auditors in four European countries and Australia concerning compliance with IFRS. They found that even when they comply with full IFRS, there were no clear audit reports or there were dual reporting in rare cases. The last section is the conclusion and suggestions to countries wishing to adopt IFRS
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