THE IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) IN DEVELOPING COUNTRIES: A CASE STUDY OF BANGLADESH

ABSTRACT

An important outgrowth of the International Accounting Standards Board's (IASB) international accounting harmonisation program is the adoption of its standards by a considerable and increasing number of accounting professional bodies in developing countries. This has taken place against the backdrop of academic arguments suggesting that the IASB standards are irrelevant and/or even harmful to these countries. This contradiction and the question of the relevance of the IASB standards to developing countries are evaluated and explored further in this research using Bangladesh as a case study. The research also examines IASs compliance with the IASB standards by a sample of listed Bangladesh companies. The results of both the compliance level and the impact of the IASB standards on the reporting practices of listed Bangladesh companies (a) appear to be significant; and (b) seem to buttress the conclusion that the IASB standards are relevant to Bangladesh and similar capitalistic developing countries where the ``shareholder/fair view'' is paramount. Bangladesh had little choice but to proceed with International Financial Reporting Standards (IFRSs)/International Accounting Standards (IASs) and that IFRSs relevance is likely to increase as economic development continues. Implementation of IFRSs is proving problematic, but is taking place slowly. This, in turn, has implications for the theoretical status of the IFRSs relevance argument and the pathways that nations might follow in implementing a national accounting system. If the only choice of accounting system is IFRSs, then the IFRSs relevance debate is effectively closed and the real issue is the pathway of change that nations might follow as they implement IFRSs. This paper, therefore, seeks to discuss, “Do Bangladeshi listed companies follow IFRSs properly or not?” and “How do culture and accounting regulation affect in implementing IFRSs in Developing Countries?” rather than considering the relevance/irrelevance of these standards, which other studies have done.

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Key Words: Bangladesh, Developing Countries, International Accounting Standards (IASs), International Financial Reporting Standards (IFRSs), International Accounting Standards Board (IASB)

Objectives of the Study/Research Questions:

The major objective of this study is to evaluate the extent of disclosure according to adopted IFRSs in Bangladesh. The specific objectives of the present study are as follows:  

a) To examine the degree of compliance of disclosure of financial information under the sample International Accounting Standards;  

b) To examine the relationship between disclosures of information as per sample adopted IFRSs and a selection of corporate attributes.

c) To ...

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