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Updated research report reviewing academic research into the effects of mandatory adoption of IFRS in the EU

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07 May 2015

The Institute of Chartered Accountants in England and Wales (ICAEW) has updated its report reviewing academic research papers that have looked at the impact of IFRS adoption both in the EU and in other countries.

The main conclusions of the updated and expanded report are unchanged, but it is now based on a review of about 200 research papers and reflects research and other publications up to 28 February 2015. As in the earlier version, the analysis shows that there is evidence of benefits following IFRS adoption in relation to financial reporting transparency and comparability, the cost of capital, market liquidity, corporate investment efficiency and cross-border capital flows. However, the evidence on some of these matters is disputed and it is unclear how far the benefits identified are attributable to the adoption of IFRS or to other concurrent institutional changes, particularly in enforcement. What is clear is that the benefits found are uneven, varying with the institutions and incentives that apply for different companies in different countries.

The report is intended to assist interested parties in the debate on the future of IFRS in the EU, by looking at what can be learned from empirical academic research on the costs and benefits of its implementation to date. It also provides a case study of the challenges involved in using empirical research to review the effects of major policy changes.

The ICAEW will be holding a webinar to discuss the lessons that can be learnt from the adoption of IFRS in the EU on 27 May.

Please click to access the report on the ICAEW website and here to access further information and registration details for the ICAEW webinar.

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