Adoption of IFRS - A Critical Review

Running head: ADOPTION OF IFRS- A CRITICAL REVIEW
Adoption of IFRS- A critical review
Name of the Student
Name of the University
Author Note

ADOPTION OF IFRS- A CRITICAL REVIEW
Abstract:
The paper intends to develop the understandability of the readers regarding the
importance of financial reporting regulations to the reporting entities in Australia. The
adoption of IFRS (International financial reporting standard) and the importance of
PAT (Positive accounting theory) in the financial reporting has been discussed
critically. In addition to this, a detailed discussion has been made by research on the
adoption of IFRS by other chosen country that is Korea. A critical evaluation of the
key issues faced in the adoption of IFRS and the issues faced after the adoption by
the reporting entities in both the countries have been presented. The later section of
report demonstrates the recommendations made to the accounting setting bodies for
facilitating the adoption and addressing the needs of users.

ADOPTION OF IFRS- A CRITICAL REVIEW
Table of Contents
Introduction:..................................................................................................................2
Discussion:...................................................................................................................3
Identifying the relevance of positive accounting theory in financial reporting:.............3
Comparing the implementation of IFRS in Australia and Korea:.................................5
Reasons of adoption of IFRS by two countries:...........................................................5
Identification of transitional issues faced by two countries:.........................................6
Identification of challenges faced by reporting entities on adoption of IFRS:..............8
Identifying benefits of adopting IFRS by reporting entities:..........................................9
Identifying the similarities and differences in IFRS adoption by Australia and Korea:
....................................................................................................................................10
Evaluating the success of adoption of IFRS in two countries:...................................11
Recommendation:.......................................................................................................11

ADOPTION OF IFRS- A CRITICAL REVIEW
Introduction:
The paper elucidates comprehensive review of relevant literature on the
theories such as positive accounting theory and the adoption of IFRS (International
financial reporting standard) by the countries. The analysis of the adoption of IFRS
has been explained in the context of two chosen counties that is Korea and
Australia. Such discussion incorporates the reasons behind the adoption of the
standard and the transitional issues faced by outlining the relevant examples. In
addition to this, a detailed discussion is presented on the advantages and challenges
faced by the reporting entities in both the chosen countries on the adoption of IFRS.
In respect to the discussion of the advantages and challenges, the relevant factors
causing such change has been presented in detail. Later section of this paper
demonstrates the evaluation of the success of adoption in the two countries. In
addition to this, recommendations has also been outlined on ways ensuring the
continuity of the standard of its relevancy to the needs of the user and other sectors
of economy.
Discussion:
Identifying the relevance of positive accounting theory in financial reporting:
This section demonstrates the evaluation of relevance of (positive accounting
theory) PAT for the financial reporting. A rapid growth has been witnessed in the
growth and development of PAT for the last four decade and this has influenced the
research work in the field of accounting. The abundant empirical study making the
relationship between stock prices, financial statements, management decisions and
return on investment is evident of the fact. It was in mid 1960s when the PAT started
coming into prominence and within the research of financial accounting in 1970s, the