Are IFRS Harder to Implement for Emerging Economies Compared to Developed Countries? A Literature Review

Abstract

In practice, the international accounting harmonization process faces cultural resistance in the concrete situations of accounting reforms. We often tend to believe that this resistance is felt more in the so-called emerging countries, rather than the developed ones. It is precisely this idea that the paper attempts to analyze, based on a literature review. The literature shows that emerging countries do not have the infrastructure or the real needs justifying a reform of international harmonization, except the need to display an IFRS label (Daske, Hail, Leuz, & Verdi, 2007), to facilitate the access of firms from emerging economies to developed financial markets. Moreover, the Anglo-American culture attached to IFRS leads to a difficulty in adopting those standards by any country whose original accounting system is continental. Indeed, for these countries, the process of international harmonization begins with an adaptation to the Anglo-Saxon accounting culture, the latter being different from the continental accounting culture at several levels.

Estimation of Benefits and Difficulties When Applying IFRS in Vietnam: From Business Perspective

“…Market issues: Raoudha (2016), Jones andFinley, 2011, Ballas et al, 2010 proved that since IFRS requires the measurement of the assets and liabilities of enterprises at market value at the reporting time, the market needs to be relatively developed be able to provide reliable information. Samaha andKhlif (2016) andATU et al, (2016) conducted studies in undeveloped and developing countries and found that the capital markets, financial markets were developing, and certain financial instruments such as convertible bonds, derivatives, preferred stocks have not been widely traded in the market.…”

Relationship between Experts and Enterprises Viewed via the IFRS Application: An Empirical Study in Vietnam

“…Kilic et al (2014) believed that IFRS applied in underdeveloped countries would help to reduce fraud when preparing financial statements because there were still some arbitrary and sensual feelings in the national standards. Raoudha (2016) felt that the biggest challenge when applying IFRS was to implement regulations on accountability and disclosure and determining the fair value of the market in emerging countries.…”