Impact of IFRS Implementation in Different Economies

LITERATURE REVIEW

IMPACT OF IFRS IMPLEMENTATION IN DIFFERENT
ECONOMIES
Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Q1. Why is this article important?...............................................................................................3
Q2. What are the research problem/ question?............................................................................4
Q3. What are the underpinning theoretical frameworks?............................................................5
Q4. What are key motivating literatures on which study depends?............................................6
Q5. Which research methods have been chosen?........................................................................7
Q6. How sample has been selected?............................................................................................8
Q7. How validity of questions has been addressed?....................................................................9
Q8. How the results were derived and what are the findings?..................................................10
Q9. Conclusions and recommendations....................................................................................11
SUMMARY...................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
IFRS i.e. International Financial Reporting Standards are required to be applied
mandatorily in all the firms operating all over the world and financial reporting has to be done in
accordance with those standards. In the current literature review impact of IFRS implementation
in different countries will be analysed and the result will be analysed and compared. The four
articles that have been taken in the report are:
1. Liu, C., Yao, L.J., Hu, N. and Liu, L., 2011. The impact of IFRS on accounting quality in
a regulated market: An empirical study of China. Journal of Accounting, Auditing &
Finance. 26(4). pp.659-676.
2. Chua, Y.L., Cheong, C.S. and Gould, G., 2012. The impact of mandatory IFRS adoption
on accounting quality: Evidence from Australia. Journal of International accounting
research. 11(1). pp.119-146.
3. Ames, D., 2013. IFRS adoption and accounting quality: The case of South
Africa. Journal of Applied Economics and Business Research. 3(3). pp.154-165.
4. Dimitropoulos, P.E., Asteriou, D., Kousenidis, D. and Leventis, S., 2013. The impact of
IFRS on accounting quality: Evidence from Greece. Advances in Accounting. 29(1).
pp.108-123.
MAIN BODY
Q1. Why is this article important?
The authors of the first article that has been taken i.e., Liu, Yao, Hu and Liu (2011),
identified in their research paper that the International Financial Reporting Standards that have
been developed and are prevalent in different English speaking countries have a diverse effect on
the countries with different economic and social background. The authors have analysed the
impact of IFRS implementation on China’s market and the impact on the firms after the
implementation of IFRS convergent standards became mandatory for all the listed firms.
The second article presented by Chua, Cheong and Gould (2012), is in accordance with
the study that was earlier conducted by above Liu, Yao, Hu and Liu (2011), and the researchers
analyse the impact of implementation of IFRS standards in Australia and the impact on the
quality of accounting has been evaluated by the authors in the context of earning management,
timely loss recognition and value relevance. The comparison of the implementation of GAAP

standards as opposed to the IFRS standards on the companies was further analysed in the
research paper.
The third article that has been taken in this literature review presented by the authors in
the year 2013, Ames (2013), identifies that whether the improvement that was guaranteed in the
accounting and its returns after the implementation of IFRS has truly been achieved in the South
Africa after IFRS became mandatory in the year 2005. Over the time of these years, the net result
or improvement that IFRS implementation has induced in the country was analysed and
interpreted.
The last article that has been taken is presented by authors, Dimitropoulos, Asteriou,
Kousenidis and Leventis (2013), conducts a wider analysis and uses 101 companies listed on the
Athens Stock Exchange i.e. exchange of Greek. It conducts an evaluation on the evidence that
whether the implementation of IFRS policies on the companies of Greece has truly resulted in
the improvement of all the three major aspects as compared to the implementation of the local
standards that were implemented earlier. The financial performance over the period of 8 years
has been compared from year 2001 to 2008 and all the three aspects has been analysed.
Q2. What are the research problem/ question?
The first article addresses the major research problem that whether the applicability of
IFRS standard is really relevant to all market types and specifically they have addressed this
question for the market of China. The research paper identifies that whether in those markets like
China where the activities of market are dependent more on the controllers and regulators rather
than the normal market mechanisms, is implementation of IFRS mandatorily really fruitful or
not. The study also addresses another research question that whether the implementation of IFRS
standards in those countries where English is not the primary language is assisting towards
improving the quality of accounting practices.
In the second article, Chua, Cheong and Gould (2012), have identified and analysed three
key aspects in the implementation of IFRS and has evaluated whether these hold true in the
context of Australian companies or not. The authors formulated three basic hypothesis which
were: earning management has changed after adopting IFRS, Timely Loss Recognition has
changed after adopting IFRS and association between accounting data and share price has
changed after adoption of IFRS in Australia. These hypothesis will be tested and appropriate
conclusions will be drawn on the company. Furthermore, Chua, Cheong and Gould (2012),