Abstract
<p>This study characterizes the results of scientific research on the effect of adopting the International Financial Reporting Standards (IFRS) that have been published in the most prestigious scientific journals in the field of accounting at the international level and it identifies avenues for further research. Based on the analysis of a set of 67 articles published by the accounting journals that make up the Social Sciences Citation Index (SSCI), published between 2000 and 2013, it is concluded that, as a general rule, IFRS adoption has a positive effect on information quality, the capital market, analysts' ability to predict, comparability, and information use. Nevertheless, this effect depends on some factors, such as country's characteristics (namely, the enforcement level) and companies' characteristics. Sharing rules is not, by itself, enough to create a common business language, and management incentives and institutional factors play a major role in framing the characteristics of financial reporting. Finally, some gaps are identified in the literature and avenues for further research are introduced.</p>
Highlights
As pointed out by Ball (2006), since accounting is shaped by economic and political factors, harmonization of accounting standards and practices is almost an inevitable consequence of the increasing integration of markets and policies
Most studies examine the effect of International Financial Reporting Standards (IFRS) adoption on information quality and the capital market, and there is a predominance of samples including a large number of countries
Most studies examine the effect of IFRS adoption on information quality (39%) and the capital and/or credit market (39%)
Summary
As pointed out by Ball (2006), since accounting is shaped by economic and political factors, harmonization of accounting standards and practices is almost an inevitable consequence of the increasing integration of markets and policies This has been witnessed by the mandatory adoption of the International Financial Reporting Standards (IFRS) in several countries in the last decade. Empirical research allows evaluating the impact of changing standards on the financial reporting quality, as well as the effects of such a change on the capital market, it can contribute to understanding the factors that influence the consequences of change (Pope & McLeay, 2011) This knowledge is important for regulators in countries that are preparing to change standards, and for regulators in countries that have already done it when considering ways to improve IFRS implementation
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