Adoption_of_International_Financial_Repo - Research Journal of Finance and Accounting ISSN 2222-1697(Paper ISSN 2222-2847(Online Vol.6 No.13 2015

Adoption_of_International_Financial_Repo - Research...

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Research Journal of Finance and Accounting ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.6, No.13, 2015 116 Adoption of International Financial Reporting Standards in Bangladesh: Benefits and Challenges Mohammad Sharif Hossain (Corresponding author) Senior Lecturer, Department of Business Administration, Uttara University, Bangladesh Uttara, Dhaka-1230, Bangladesh. Md. Salim Hasan Senior Lecturer, Department of Business Administration, Uttara University, Bangladesh Uttara, Dhaka-1230, Bangladesh. Md. Safiuddin Lecturer, Department of Business Administration, Uttara University, Bangladesh Uttara, Dhaka-1230, Bangladesh. Abstract The study focuses on the recent adoption status of International Financial Reporting Standards (IFRS) in a developing economy like Bangladesh. The objectives of this paper are to identify the development of the accounting profession in Bangladesh, the legal and regulatory framework of accounting, IFRS adoption process, benefits and challenges of adopting IFRS in Bangladesh. The issues raised in the paper are drawn mainly from prior works of literature and secondary information. IFRS adoption promises a lot of benefits like decreased cost of capital, improved financial reporting quality, increased ability to secure borders-listing, better Access to Global Capital Markets and attraction of foreign direct investment, etc. Some challenges also exist like the development of a legal and regulatory framework, low audit fees, awareness campaign and training of personnel etc. which must be overcome for successful adoption of IAS/IFRS. The paper also argues that the Financial Reporting Council (FRC), as proposed by the draft Financial Reporting Act 2013 (FRA) should not be handled by non-experts body. This paper strongly recommends that the ICAB council may be reformed consisting of Three Board - (i) Accounting Standard Board (ii) Auditing Standard Board and (iii) Financial Reports Review Board to ensure compliance of international standard and effective implementation. Keywords: International Financial Reporting Standards, Adoption, benefits and challenges, ICAB, Bangladesh. 1. Introduction International Accounting Standards Board (IASB) based in London, England, was established in April 2001 as the successor to the International Accounting Standards Committee (IASC). It is the responsibility of the IASB for developing and implementing International Financial Reporting Standards (the new name of International Accounting Standards (IAS) issued after 2001) by its member countries around the world. Adoption of IFRS has received much attention in the professional and academic literature of the developed, emerging, developing and underdeveloped countries universal. International Financial Reporting Standards (IFRS) refer to a widespread, high-quality set of accounting standards and interpretations used in the preparation of financial statements. IFRS are considered a principles-based set of standards in that they set up broad rules with greater importance on interpretation and the use of judgment, rather than reliance on specific bright-lines. (Tomaszewski &

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