Benefits And Challenges of Ifrs Adoption

Running Head: THE BENEFITS AND CHALLENGES OF IFRS ADOPTION IN UAE
THE BENEFITS AND CHALLENGES OF IFRS ADOPTION IN UAE
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1THE BENEFITS AND CHALLENGES OF IFRS ADOPTION IN UAE
Table of Contents
Introduction................................................................................................................................2
Research Problem.......................................................................................................................3
Hypothesis..................................................................................................................................3
Research Plan.............................................................................................................................3
Conclusion..................................................................................................................................4
Reference....................................................................................................................................6

2THE BENEFITS AND CHALLENGES OF IFRS ADOPTION IN UAE
Introduction
It is due to globalization process, the interest shown towards harmonization of process
of the financial reporting through introduction of unitary set of the IFRS at the globalized
level, have been enlarged. Now, IFRS has become prevalent set of the standards of financial
reporting that is used globally (Trabelsi & Trabelsi, 2014). It is widely followed and most
accepted standards of accounting all over world. It plays key role in raising quality of
accounting due to its strict transparency requirements (Abedana & Gayomey, 2016). The
speeding of convergence or the harmonization process of local regulation with IFRS was
made by the aspects, for instance disclosing of accounting information according to local
standards not fulfills always the needs of information of the market leaders, which existing
differences in between the local system of accounting represents key detriments in process of
understanding of foreign investors of disclosed information of the accounting in other
countries’ financial statements (Alemi & Pasricha, 2016).
The rapid changes in financial reporting in world of the financial reporting is
demanding enforcement of the IFRS with purpose of promoting more credibility,
consistency, accounting information relevancy and the globalization of economies. Moreover,
system of financial reporting of the business operations has experienced immense
transformation over the last couple of the decades (Zakari, 2014). Accounting standards’
convergence begun in early 2001 with objective in bringing harmonization and transparency
of standards. The differences in the compliance are engrained in various market
environmental aspects as well as structures of the corporate governance, under which there is
implementation of IFRS (Edeigba, 2017).
IFRS enforcement contributes towards global flow of investment in the developing
and developed economies as well as it will enhance investors’ ability for comparing options
of investment on globalized basis, consequently falling risk of the judgement errors. There
are indications by the researchers regarding requirement of examining challenges
encountered in the actual implementations of IFRS in the developing economies (Perera &
Chand, 2015). Hence, this research paper aims for discussing the benefits and the challenges
of adoption of the IFRS in UAE. For this assessment will be done on the benefits gained and
challenged experienced by the entities in UAE, following IFRS introduction. Since, European
Union announced for adopting the IFRS by the listed entities, various countries following the