The Impact of IFRS Adoption on Financial Reporting Quality

Abstract

The adoption of International Financial Reporting Standards (IFRS) has significantly reshaped the global financial reporting landscape. This article examines the impact of IFRS adoption on financial reporting quality, exploring both potential benefits and challenges. Drawing upon relevant social science theories and empirical evidence, the article analyzes the effects of IFRS on comparability, transparency, and decision-usefulness of financial statements. It further discusses the challenges associated with implementation, such as cost implications, training requirements, and potential divergence from national accounting standards. The adoption of International Financial Reporting Standards (IFRS) has been a significant global phenomenon, with numerous countries transitioning from their local Generally Accepted Accounting Principles (GAAP) to IFRS. This study explores the impact of IFRS adoption on financial reporting quality, examining changes in transparency, comparability, and reliability of financial information. Through an empirical analysis, we assess how IFRS adoption influences the quality of financial reporting by examining key financial metrics and indicators. Our findings suggest that the adoption of IFRS has a multifaceted impact on financial reporting quality. While some aspects of transparency and comparability are enhanced, there may be challenges in achieving uniform improvements across diverse jurisdictions. The study also delves into the potential economic consequences of these changes, providing insights for policymakers, regulators, and practitioners.