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Problems of Adoption and Application of International Financial Reporting Standards (Ifrs) in Bangladesh

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Problems of Adoption and Application of International Financial Reporting Standards (Ifrs) in Bangladesh
International Journal of Business and Management

December, 2009

Problems of Adoption and Application of International Financial Reporting Standards (IFRS) in Bangladesh
Sumon Bhattacharjee (Corresponding author) Department of Business Administration, East West University 43-46 Mohakhali C/A, Dhaka, Bangladesh Tel: 88-17-1285-9617 E-mail: sumon@ewubd.edu Muhammad Zahirul Islam Department of Business Administration, East West University 43-46 Mohakhali C/A, Dhaka, Bangladesh Tel: 88-17-1665-3964
Abstract

E-mail: zahir046@ewubd.edu

The adoption of IFRS around the world is occurring rapidly to bring about accounting quality improvement through a uniform set of standards for financial reporting. However, accounting quality is a function of the firm’s overall institutional setting, including the legal and political system of the country in which the firm resides. This paper documents the prospects of IFRS adoption and their impact on the financial reporting environment of Bangladesh considering the underlying institutional and economic factors. It argues about trade-off between the scale advantage of IFRSs (designed globally by the highly sophisticated authority) and the local advantage of decentralized adaptation. It is also an effort to focus on the problems relating to adoption of IFRS in Bangladesh and to reach some concluding remarks for better applicability of accounting standards in ensuring transparent information environment.
Keywords: IFRS adoption, IAS, Accounting quality, ICAB, Bangladesh 1. Introduction

International accounting literature provides evidence that accounting quality has economic consequences, such as costs of capital (Leuz and Verrecchia, 2000), efficiency of capital allocation (Bushman, Piotroski, & Smith, 2006; Sun, 2006), and international capital mobility (Young and Guenther, 2002). Also, economic changes are likely to have similar consequences as Land and Lang (2002) document that accounting quality has improved worldwide


References: December, 2009 Frankel, R., & Li, X December, 2009 1,2,7,8,10,11,12,14,16,17,18,19,20,21,23,2 4,26,27,28,30,31,32,33,34,35,36,37,38,39, 40 & 41.
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