The Unintended Consequences of Applying IFRS Standards: Regulators’ Perceptions

This study focuses on the application of International Financial Reporting Standards (IFRS) that have become the ‘bi-lingual’ language of reporting. The purpose of this paper is to extend on the current literature by investigating whether there are unintended consequences of applying mandatory accounting standards across countries. The empirical study investigating on these unintended consequences is still in its infancy. We adopted the suggested hand collected research design by examining the Regulation’s accounting objectives of transparency and comparability. The Korean Accounting Standards Board (KASB), the Institute of Certified Public Accountants in Kenya (ICPAK) and the International Accounting Standard Board (IASB) Regulators were chosen for the study. The results show that there are unintended consequences especially with the way the IASB Regulator has given discretion in the application of the IFRS Standards. Also, due to the lack of IASB Regulator’s enforcement that has been solely left to the national Regulators. We give specific recommendations that the Regulators need to debate further for better application of the IFRS Standards.