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The Development of Accounting Regulation in Iraq and the IFRS Adoption Decision: An Institutional Perspective

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  • Hassan, Enas A.
  • Rankin, Michaela
  • Lu, Wei

Abstract

This paper reviews the historical development of accounting regulation in Iraq and analyzes, from an institutional perspective, both the decision to adopt International Financial Reporting Standards (IFRS), and the factors likely to impact the expansion of IFRS application beyond listed companies. We find that all three forms of institutional isomorphism (coercive, mimetic, and normative) explain the initial decision to adopt IFRS. The most significant force in the decision to adopt IFRS is coercive pressure, from western forces following the fall of the Ba'ath regime, and from international aid organizations. Further, we find that the accounting system in Iraq is likely to be further advanced due to mimetic and normative pressures from Iraq's trade partners, multinational corporations, and the accounting profession. The paper concludes with a discussion of lessons that can assist other developing nations, and in particular countries in the Middle East in their decision to adopt IFRS. It is important that IFRS adoption is accompanied by reform to governance and investor protection regimes, together with investment in education and training to support ongoing implementation. Otherwise, IFRS adoption may be perceived as merely symbolic.

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  • Hassan, Enas A. & Rankin, Michaela & Lu, Wei, 2014. "The Development of Accounting Regulation in Iraq and the IFRS Adoption Decision: An Institutional Perspective," The International Journal of Accounting, Elsevier, vol. 49(3), pages 371-390.
    • Handle: RePEc:eee:accoun:v:49:y:2014:i:3:p:371-390
    DOI: 10.1016/j.intacc.2014.07.001
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    Cited by:

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    2. Paula Silva, Ana & Fontes, Alexandra & Martins, Adelaide, 2021. "Perceptions regarding the implementation of International Financial Reporting Standards in Portugal and Brazil," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 44(C).
    3. Robert J. Moore, 2021. "Emerging from war: Public policy and patterns of foreign direct investment recovery in postwar environments," Journal of International Business Policy, Palgrave Macmillan, vol. 4(4), pages 455-475, December.
    4. Rajat Deb & Joydeep Das, 2018. "IFRSs Convergence and Expectation Gap: Vindication from Practitioners," Metamorphosis: A Journal of Management Research, , vol. 17(2), pages 86-99, December.
    5. Kim, Oksana, 2016. "The IFRS Adoption Reform through the Lens of Neoinstitutionalism: The Case of the Russian Federation," The International Journal of Accounting, Elsevier, vol. 51(3), pages 345-362.
    6. Maradona, Agus Fredy & Chand, Parmod, 2018. "The Pathway of Transition to International Financial Reporting Standards (IFRS) in Developing Countries: Evidence from Indonesia," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 30(C), pages 57-68.
    7. Mahdi Salehi & Grzegorz Zimon & Hayder Adnan Hashim & Ryszard Jędrzejczak & Adam Sadowski, 2022. "Accounting Quality and Audit Attributes on the Stock Price Crashes in an Emerging Market," Risks, MDPI, vol. 10(10), pages 1-24, October.
    8. Ferhat D. Zengul & James D. Byrd & Nurettin Oner & Mark Edmonds & Arline Savage, 2019. "Exploring corporate governance research in accounting journals through latent semantic and topic analyses," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 26(4), pages 175-192, October.
    9. Costas Siriopoulos & Athanasios Tsagkanos & Argyro Svingou & Evangelos Daskalopoulos, 2021. "Foreign Direct Investment in GCC Countries: The Essential Influence of Governance and the Adoption of IFRS," JRFM, MDPI, vol. 14(6), pages 1-13, June.
    10. Nurunnabi, Mohammad, 2018. "Perceived costs and benefits of IFRS adoption in Saudi Arabia: An exploratory study," Research in Accounting Regulation, Elsevier, vol. 30(2), pages 166-175.
    11. Ahmed Eltweri & Alessio Faccia & Scott Foster, 2022. "International Standards on Auditing (ISAs) Adoption: An Institutional Perspective," Administrative Sciences, MDPI, vol. 12(3), pages 1-19, September.
    12. Khaldoon Al†Htaybat, 2018. "IFRS Adoption in Emerging Markets: The Case of Jordan," Australian Accounting Review, CPA Australia, vol. 28(1), pages 28-47, March.
    13. Shruti, R. & Thenmozhi, M., 2023. "Founder ownership and value relevance of IFRS convergence: Role of institutional investors," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    Accounting regulation; International Financial Reporting Standards (IFRS); Institutional theory; Iraq;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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