Adoption of International Financial Reporting Standard: A Literature Review


  • Abdul Ghani Faiyyaz College of Business Administration, Jazan University, Kingdom of Saudi Arabia
  • Abdullah Malik Al-Barkaat Institute of Management, Raja Mahendra Pratap Singh University, Aligarh, India



Accounting, International Financial Reporting Standard, Uniformity, Foreign Direct Investment (FDI)


International Financial Reporting Standard (IFRS) refers to a unique, uniform, simple, and easily understandable accounting standard acceptable and applied across the globe by various firms. It is emerging as a powerful device to bring uniformity to financial reporting by companies at the global level. Due to rapid industrialization and internationalization, the countries opened their avenue to foreign corporations. Therefore, it has been necessitated to have an accounting system that could bring uniformity and acceptability to financial reporting across borders. This review article has explored the present situation of the IFRS in the light of its emergence at the global level. The paper also proposes the model by merging the IFRS constructs with FDI, robust financial information reporting, transparency, and comparability construct by drawing together and developing the scale for measuring quality financial information through International Financial reporting standards based on existing literature. Against this backdrop, the present review paper seeks to highlight different dimensions and the pros and cons of using the International Financial Reporting Standard across borders. The content analysis has been adopted as the methodological framework for the literature review. The result of studies have confirmed that IFRS assimilation will improve transparency, comparability across the spectrum.


Download data is not yet available.


Adetula, D. T., Nwobu, O., & Owolabi, F. (2014).International financial reporting standards and foreign direct investment in Nigeria. International Journal of Commerce, Business and Management, 3(3), 446-449.

Akisik, O. (2014). Financial reporting and foreign direct investments in Latin America. Accounting in Latin America, 41-47.

Alghamdi, S. A. (2014). Relevance of international financial reporting standards to emerging markets: evidence from saudiarabia. Arab Journal of Administrative Sciences, 21(1).

Almotairy, O. S., & Stainbank, L. J. (2014). Compliance with international education standards in Saudi Arabia: policy and educational implications. Journal of Business Studies Quarterly, 5(4), 5.

Alsuhaibani, A. (2012). The expected impact of IFRS adoption on Saudi Arabia based on lessons from other countries: A focus on the telecommunication Business. Procedia-Social and Behavioral Sciences, 62, 1190-1198.

Amrutha, P., Selvam, M., & Kathiravan, C. (2019). Impact of Converging to IFRS on Key Financial Ratios with Reference to BSE Listed Firms. International Journal of Psychosocial Rehabilitation, 23(01).

Ashok, K. K. (2014). International financial reporting standard (IFRS): Prospects and challenges. J Account Mark, 3(111), 2.

Athma, P., &Rajyalaxmi, N. (2013). Accounting standards in india: Adoption of IFRS. Journal of Commerce and Accounting Research, 2(2), 39.

Babu, R., Narendra, J. M., &Venkateswarlu, M. (2016). International Financial Reporting Standards (IFRS) in India: Problems and Challenges. In National Seminar on IND-AS: A Road Map for IFRS in India, ISBN: 978-93-5254-333 (Vol. 5)

Bajaj, N., Singh, H., & Shirur, S.(2019). Adoption of International Financial Reporting Standards (IFRS) in Accounting Curriculum in IndiaInternational Journal of Innovative Technology and Exploring Engineering, 8(7S2),208-218

Ball, R. (2006). International Financial Reporting Standards (IFRS): pros and cons for investors. Accounting and business research, 36(sup1), 5-27.

Chen, C. J., Ding, Y., & Xu, B. (2014). Convergence of accounting standards and foreign direct investment. The International Journal of Accounting, 49(1), 53-86.

Chen, L., Ng, J., & Tsang, A. (2015).The effect of mandatory IFRS adoption on international cross-listings. The Accounting Review, 90(4), 1395-1435.

DeFond, M., Hu, X., Hung, M., & Li, S. (2011). The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability. Journal of Accounting and Economics, 51(3), 240-258.

Elosiuba, J. N., & Okoye, E. I. (2018). Effects of International Financial Reporting Standards on Corporate Performance of Selected Banks Listed on Nigeria Stock Exchange.Annals of Spiru Haret University Economic Series, 19(1).77-104.

Farazandehnia, A., & Baghani, A. (2015). Effects of national accounting standards convergence to international accounting standards on foreign direct investment. Management Science Letters, 5(9), 827-832.

Firoz, M., Ansari, A. A., &Akhtar, K. (2011). IFRS-impact on Indian banking industry. International Journal of Business and Management, 6(3), 277-283.

Gordon, L. A., Loeb, M. P., & Zhu, W. (2012). The impact of IFRS adoption on foreign direct investment. Journal of accounting and public policy, 31(4), 374-398.

Hassan, M.F.(2019). Analysis of Effects of IFRS Adoption on the Comparability of Financial Reporting: Evidence from Saudi Listed Companies. Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB), 8(1), 2698-2714.

Herath, S. K., & Alsulmi, F. H. (2017). International financial reporting standards (IFRS): The benefits, obstacles, and opportunities for implementation in Saudi Arabia. International Journal of Social Science and Business, 2(1), 1-18.

Houqe, M. N., Monem, R. M., & van Zijl, T. (2016). The economic consequences of IFRS adoption: Evidence from New Zealand. Journal of International Accounting, Auditing and Taxation, 27, 40-48.

Jain, P. (2011). IFRS implementation in India: Opportunities and challenges. World Journal of Social Sciences, 1(1), 125-136.

Kamath, R., & Desai, R. (2014). The Impact of IFRS Adoption on the Financial Activities of Companies in India: An Empirical Study. IUP Journal of Accounting Research & Audit Practices, 13(3)

Lakew, D. M., & Musa, M. G. (2019). Preparedness to teach international financial reporting standards (ifrs) in Ethiopia: a study on selected universities. International Journal of Commerce and Finance, 5(2), 147-157

Lungu, C. I., Caraiani, C., &Dascălu, C. (2017). The impact of IFRS adoption on foreign direct investments: Insights for emerging countries. Accounting in Europe, 14(3), 331-357.

Mahmood, Z., Khan, A. B., urRehman, A., & Atta, S. (2018). Preliminary Insights on the Adoption of International Financial Reporting Standard (IFRS) for Small and Medium Enterprises (SMEs) in Pakistan. Journal of Accounting and Finance in Emerging Economies, 4(1), 95-110.

Márquez-Ramos, L. (2008). The effect of IFRS adoption on trade and foreign direct investments. In International Trade and Finance Association Conference Papers (pp. 19). bepress.

Nejad, M. Y., Ahmad, A. Z. L. I. N. A., Mdsalleh, F. A. I. R. U. Z., & Rahim, R. A. (2018). IFRS adoption and foreign direct investment: An application of the LSDVC estimator. In Proceeding of the 5th International Conference on Management and Muamalah.

Nejad, M. Y., Ahmad, A., & Rahim, R. A. (2018).International financial reporting standards foreign direct investment in ASEAN countries. GadjahMada International Journal of Business, 20(3), 303.

Nurunnabi, M. (2017). IFRS and Saudi accounting standards: A critical investigation. International Journal of Disclosure and Governance, 14(3), 191-206.

Obradović, V. (2018).The international financial reporting standard for small and medium-sized entities in the Republic of Serbia. Ekonomskihorizonti, 20(3), 229-242.

Odo, J. O. (2018). Effects of International Financial Reporting Standards (IFRS) on Foreign Direct Investment: A Study of Nigerian Commercial Banks. International Journal of Academic Research in Business and Social Sciences, 8(12), 1091-1103.

Odoemelam, N., Okafor, R. G., & Ofoegbu, N. G. (2019). Effect of international financial reporting standard (IFRS) adoption on earnings value relevance of quoted Nigerian firms. Cogent Business & Management, 6(1), 1643520.

Okpala, K. E. (2012). Adoption of IFRS and financial statements effects: The perceived implications on FDI and Nigeria economy. Australian Journal of Business and Management Research, 2(5), 76.

Patel, B. K., & Shah, B. M. (2015).Application and challenges of international financial reporting standard to indian corporate. Clear International Journal of Research in Commerce & Management, 6(11).

Patro, A., & Gupta, V. K. (2012).Adoption of International Financial Reporting Standards (IFRS) in accounting curriculum in India-An empirical study. Procedia Economics and Finance, 2, 227-236.

Samaha, K. and Khlif, H. (2016). Adoption of and compliance with IFRS in developing countries: A synthesis of theories and directions for future research. Journal of Accounting in Emerging Economies, 6(1), 33-49.

Sambaru, M., &Kavitha, N. V. (2014). A Study on IFRS in India. International Journal of Innovative Research & Development, 3(12), 362-367.

Sharma, S., & Singh, G. (2017). Impact of IFRS on the Financial Reporting Practices of Selected Countries: Review and Analysis. International Journal of Economic Perspectives, 11(2).

Stent, W., Bradbury, M., & Hooks, J. (2013). What firms’ discretionary narrative disclosures reveal about the adoption of International Financial Reporting Standards. Australian Accounting Review, 23(3), 252-263.

Udofia, I. E. (2018). IFRS adoption and cross border investment in Nigeria. Journal of Accounting and Management Information Systems, 17(4), 605-625.

Utama, S., Farahmita, A., & Anggraita, V. (2017).Economic Consequences of IFRS Adoptions around the ASEAN Countries. International Journal of Economics & Management, 11.

Varghese, D. T. (2014). Convergence of GAAP to IFRS: Opportunities and Challenges for India. International Journal Of Business and Management Invention, 3(3), 09-15.

Wan Ismail, W. A., van Zijl, T., & Dunstan, K. L. (2010). Earnings quality and the adoption of IFRS-based accounting standards: Evidence from an emerging market. Available at SSRN 1566634.

Yousefinejad, M., Ahmad, A., Salleh, F., Rahim, R. A., & Azam, H. (2018). The Mediating Effect of Information Asymmetry on IFRS and Foreign Direct Investment. International Journal of Economics & Management, 12(2).

Zeghal, D., & Mhedhbi, K. (2006). An analysis of the factors affecting the adoption of international accounting standards by developing countries. The International Journal of Accounting, 41(4), 373-386.

Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of Business Research, 104, 333-339.

White, M. D., & Marsh, E. E. (2006). Content analysis: A flexible methodology. Library trends, 55(1), 22-45.




How to Cite

Abdul, G. F., & Abdullah , M. (2022). Adoption of International Financial Reporting Standard: A Literature Review . American Journal of Economics and Business Innovation, 1(3), 36–43.