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CONVERGENCE-TOWARDS-IFRS-IN-MALAYSIA-ISSUES-CHALLENGES-AND-OPPORTUNITIES

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CONVERGENCE-TOWARDS-IFRS-IN-MALAYSIA-ISSUES-CHALLENGES-AND-OPPORTUNITIES
International Journal of Business, Economics and Law, Vol. 1
ISSN 2289-1552

2012

CONVERGENCE TOWARDS IFRS IN MALAYSIA: ISSUES, CHALLENGES AND
OPPORTUNITIES
Prof. Dr. Hajah Mustafa Mohd Hanefah
Faculty of Economic and Muamalat
Universiti Sains Islam Malaysia
1 06-7988607
Jaspal Singh
Faculty of Business, Communication and Law
INTI International University, Malaysia. jaspal.joginders@newinti.edu.my, 06-7982000

ABSTRACT
Malaysia need to compete with its ASEAN neighbours and also other countries in securing FDI, and one of the ways to maintain competitiveness is by converging to IFRS. Like many other IFRS compliant countries in the world, Malaysia also faces problems in full adoption of IFRS at the initial stages. But, on the contrary, Malaysia is having a good platform for an easy adoption. The future challenges are also discussed as well as some salient issues pertaining to Malaysian Financial Reporting Standards
(MFRS) framework compared to International Financial Reporting Standards (IFRS). This paper also discusses the notion of full adoption of IFRS and opportunities as compared to convergence, not only merely a convergence.
Keywords: Convergence, Foreign Direct Investment (FDI), Malaysia, Malaysian Financial Reporting Standards (MFRS),
International Financial Reporting Standards (IFRS).

INTRODUCTION
In the year 2008 the then Malaysian Accounting Standard Board’s (MASB) chairman, Dato ' Zainal Abidin Putih, announced that
Malaysia will be converging with International Accounting Standard Board (IASB)’s International Financial Reporting Standard
(IFRS). From that point onwards many initiatives were lined up by MASB and the Malaysian Institute of Accountants (MIA) in order to educate, train and inform all the relevant stakeholders in tandem with fast approaching deadline to converge, which is for the earliest year-end financial reporting date, 31 December 2012. On 19 November 2011, MASB issued the third accounting framework to be


References: AOSSG. (2010). Financial Reporting Issues relating to Islamic Finance. Group, Asian- Oceanian Standard-Setters. Barth, M. E., Landsman, W. R. and Lang, M. H. (2007). International accounting standards and accounting quality. Stanford University Graduate School of Business Research Paper No Beke, J. (2010). International accounitng harmonisation: Evidence from Europe. International Business and Management , 1 (1), 48-61. Beneish, M., & Yohn, T. (2008). Information friction and investor home bias: A perspective on the effect of global IFRS Beneish, M., Miller, B., & Yohn, T. (2012). The Impact of Financial Reporting on Equity versus Debt Markets: Chadha, B. (2012, April 16). Infosys. Retrieved April 16, 2012, from Infosys Web site: http://www.infosysblogs.com/sap/ Chan, J.P.C.,Ding, Y slides. Retrieved January 7, 2012, from Web site: "http://www.oecdtokyo2.org/pdf/events/021018EN01.pdf" http :// www. 16, 2012,from Gardiner, R. (2000). Foreign direct investment:A lead driver for sustainable development?. Retrieved January 7, 2012, from Web site: HYPERLINK Gomes, M. (2011, January). Accounting in emerging economies. Accountants Today , 24 (1), pp. 32-34. Horton, J., Serafeim, G. and Serafeim, I. (2010). Does mandatory IFRS adoption improve the information environment?, Working Paper (London School of Economics and Harvard Business School). Jebaretnam, S. (2012, March 28). Getting up to speed with salient features of the updated MFRS and Malaysia 's dual financial reporting framework Kinsey, J., Jermakowicz, E., & Vongphanith, T. (2008). Capital Market Consequences of European Firms’ Mandatory Adoption of IFRS KPMG. (2011). Insights into Malaysia 's convergence with IFRS: Transition to IFRS-compliant Malaysia Financial Reporting Standards (MFRS) Mohammad Faiz Azmi. (2010). Transition to 2012: Equipping future finance professionals. Presentation slides. ACCA National Education Forum Muwanika, P., Anok, P., & Kaggwa, D. S. (2012). Retrieved March 2012, 2, from Scribd: http://www.scribd.com/doc/58438353/Assessing-the-Challenges-of-SMEs-in-Adopting- IFRS-in-Uganda Nazatul Izma. (2009, November). Convergence on track. Accountants Today , 22 (11), pp. 6-9. Nazatul Izma. (2010, April). IFRS for SME. Accountants Today , 23 (4), pp. 26-27. 6, 2012,from n.a. (2012, January/February). First step towards IFRS convergence. Accountants Today , 25 (1), pp. 28-31. n.a. (2012, May/June). MASB on Convergence. Accountants Today , 25 (3), pp. 12-13. Raman, K. (2010, April). IFRS implementation: A systems viewpoint. Accountants Today , 23 (4), pp. 28-30. Suh, C. (2011). IFRS Adoption: Korean experiences. MIA International Accountants Conference. Kuala Lumpur. Sylph, J. (2012). A global perspective of IFRS. The Malaysian Institute of Accountants Forum. 28 March 2012. Kuala Lumpur. Zeff, S. A., & Nobes, C. W. (2010). Commentary: Has Australia (or Any Other Jurisdiction) ‘Adopted’ IFRS? Australian Accounting Review , 20 (2), 178-184.
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