Abstract
Currently, International Financial Reporting Standards (IFRS) have been adopted by over 143 countries all over the world. The aims of this standard is to develop, in the public interest, a single set of high-quality, comprehensible, enforceable and globally accepted financial reporting standards based on clearly expressed principles and legislations. Nevertheless, its adoption procedure creates challenges to the adopter. Thus, the purpose of this study was to investigate the possible challenges of adoption of international financial reporting standards (IFRS). A sample of fifteen studies and articles related to challenge of International Financial Reporting Standards adoption that had been done starting from 2012 were selected from journal articles; Master of Science thesis (MSC) and master of business administration (MBA) thesis, then the collected data were analyzed using qualitative meta- synthesis which is presented using tables and narratives. The study found out that cost of adoption, training of relevant accounting professional, lack of competent man power, lack of proper financial reporting guidance, use of fair value accounting in comparison to historical cost method, Lack of proper instructions from regulatory bodies, increases the risk for handling in interpretation of financial statements and modernized information technology system in handling the transitions to standard were the main challenges of International Financial Reporting Standards adoption.
Highlights
Most countries of the world have transformed their accounting practices especially during the last few decades of the 21 century. Such transformation incorporates the adoption and adaptation of local accounting practices and harmonizing it with that of the International Financial Reporting Standards (IFRS) formerly International Accounting Standards (IAS). This revolution, as it is evidenced, is started in 2002 when European Union made it mandatory for publicly traded companies to present consolidated financial statements in conformity with International Financial Reporting Standards starting from January 01, 2005 [1, 2]
The general objective of this review study is to investigate the possible challenges of IFRS adoption
Once the data were gathered from articles, Master of Science thesis (MSC) thesis and master of business administration (MBA) thesis, a clustering of those data were undertaken by the researcher
Summary
Most countries of the world have transformed their accounting practices especially during the last few decades of the 21 century. Such transformation incorporates the adoption and adaptation of local accounting practices and harmonizing it with that of the International Financial Reporting Standards (IFRS) formerly International Accounting Standards (IAS). IFRSs are a set of accounting principles that is rapidly gaining acceptance on a worldwide basis They are published by International Accounting Standards Board (IASB) which based in London. It is more focused on objectives and principle based.
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