IFRS: Markets, Practice, and Politics
Foundations and Trends® in Accounting: Vol. 15: No. 1–2, pp 1-262. http://dx.doi.org/10.1561/1400000055
223 Pages Posted: 23 May 2021 Last revised: 26 Jul 2021
Date Written: May 18, 2021
This monograph reviews the academic literature on market outcomes, reporting practices and the political economy behind the global use of International Financial Reporting Standards (IFRS). We start with a conceptual discussion of expected benefits and costs of an international harmonization of accounting regulation and explain why predictions on possible outcomes are ambiguous. Our first main section discusses the characteristics of an “ideal” IFRS experiment that would allow to draw causal inferences on the effects of IFRS adoption. We offer a comprehensive overview of research on the impact of IFRS on capital markets, particularly around firsttime adoption and during the global financial crisis. In our second main section, we describe current IFRS reporting practices, including digital reporting (XBRL), and benchmark the availability, accessibility, and processing of IFRS financial information against the information environment in the United States. We complement this discussion by evidence on the use of IFRS reporting choices such as the different fair value options. The third main section provides information about important institutional features of IFRS standard setting and how political powers affect decisions on IFRS adoption, standard setting, and enforcement. The monograph concludes with an assessment of the impact of IFRS research and outlines emerging trends that provide opportunities for future research. Overall, this monograph offers a summary of research findings and methods that are relevant for the analysis of future regulatory innovations, such as the international standardization of sustainability (or ESG) reporting.
Keywords: IFRS, international accounting, disclosure, compliance, capital markets, real effects, XBRL, digitalization, fair value, financial crisis, politics, research impact, literature review
JEL Classification: M41, M48, G14, G39
Suggested Citation: Suggested Citation