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Determinants of Voluntary International Financial Reporting Standards Application: Review from Theory to Empirical Research

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  • Ngoc Giau Nguyen

    (School of Finance and Accounting, Industrial University of Ho Chi Minh City, Ho Chi Minh 70000, Vietnam
    Faculty of Economics, Thu Dau Mot University, Thu Dau Mot City 75000, Vietnam)

  • Ngoc Tien Nguyen

    (Faculty of Economics, Thu Dau Mot University, Thu Dau Mot City 75000, Vietnam)

Abstract

IFRS has become a global financial reporting standard, with many countries adopting it as their primary framework and others contemplating its adoption. Research on voluntary IFRS adoption sheds light on global convergence progress and its impact on accounting practices. This study aims to elucidate the factors influencing the voluntary adoption of IFRS by examining, analyzing, and synthesizing findings from empirical studies conducted worldwide. The research scrutinizes 185 relevant studies on the voluntary adoption of IFRS published before August 2023, employing a systematic literature review methodology. Our assessment reveals that, in prior research, the factors influencing the voluntary adoption of IFRS are categorized into seven main factors, including corporate operations, capital structure, ownership structure, internationalization, financial performance, corporate governance, and several other factors. These studies employ various methodologies, including data surveys and cross-sectional data, to estimate the relationships between these factors and the voluntary adoption of IFRS. In addition to providing an evaluation of the research in this field, this study can serve as a framework for future researchers to link and compare the results of different studies. We anticipate that this research will be beneficial for future scholars interested in the factors influencing the voluntary adoption of IFRS. Furthermore, the study proposes essential guidance for future research considerations.

Suggested Citation

  • Ngoc Giau Nguyen & Ngoc Tien Nguyen, 2023. "Determinants of Voluntary International Financial Reporting Standards Application: Review from Theory to Empirical Research," JRFM, MDPI, vol. 16(11), pages 1-15, November.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:11:p:485-:d:1281198
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    References listed on IDEAS

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    1. Karl A. Muller & Edward J. Riedl & Thorsten Sellhorn, 2008. "Consequences of Voluntary and Mandatory Fair Value Accounting: Evidence Surrounding IFRS Adoption in the EU Real Estate Industry," Harvard Business School Working Papers 09-033, Harvard Business School.
    2. Gaetano Matonti & Giuseppe Iuliano, 2012. "Voluntary Adoption of Ifrs by Italian Private Firms: A Study Of The Determinants," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 2(2), pages 43-70, December.
    3. George Emmanuel Iatridis, 2012. "Voluntary IFRS disclosures: evidence from the transition from UK GAAP to IFRSs," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 27(6), pages 573-597, June.
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    5. Kabiru Isa Dandago, 2013. "Decision Usefulness Approach to Financial Reporting: A Case for Malaysian Inland Revenue Board," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(6), pages 772-784, June.
    6. Stephen A. Ross, 1977. "The Determination of Financial Structure: The Incentive-Signalling Approach," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 23-40, Spring.
    7. Gaetano Matonti & Giuseppe Iuliano, 2012. "Voluntary Adoption of IFRS by Italian Private Firms: A Study of the Determinants," Eurasian Business Review, Eurasia Business and Economics Society, vol. 2(2), pages 43-70, Fall.
    8. Melinda Muth & Lex Donaldson, 1998. "Stewardship Theory and Board Structure: a contingency approach," Corporate Governance: An International Review, Wiley Blackwell, vol. 6(1), pages 5-28, January.
    9. Kabiru Isa Dandago & Nur Isdawani Binti Hassan, 2013. "Decision Usefulness Approach to Financial Reporting: A Case for Malaysian Inland Revenue Board," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(6), pages 772-784.
    10. Najeb Masoud, 2017. "The effects of mandatory IFRS adoption on financial analysts’ forecast: Evidence from Jordan," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1290331-129, January.
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