Convergence obstacles with IASB standards: Evidence from Iran

Fakhroddin Mohammadrezaei, Bahman Banimahd, Norman Mohd Saleh

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

Today, convergence with IASB Standards (IS) is one of the most controversial topics for both researchers and regulators. Although IS have been widely adopted and implemented around the world, there is little knowledge about the convergence obstacles with these standards in developing countries. This study intends to identify and highlight the possible obstacles for full convergence with IS to determine the extent to which, and the timing that full convergence with IS can be achieved in Iran. Different business, financial, legal, cultural, accounting and auditing environments are discussed as the most important environmental challenges to achieve full convergence. In addition, problems with the complexity of the standards, translation problems, knowledge and awareness deficiency, conflict with legal mechanism, and problems with fair value measurement requirements are reviewed as the adoption and implementation challenges in Iran. Our evidence reports (1) whether we can expect that developing countries achieve full convergence with IS, given that IS have been developed based on the needs and circumstances of developed countries; and (2) that due to the fundamental role of companies reporting incentives as drivers reporting quality, a single set of accounting standards, IS, cannot solely produce comparable financial practices and reporting, even if these standards are fully and strictly adopted and implemented. Thus, it can be concluded that, first, due to the aforementioned reasons, full adoption of IS by Iran seems very difficult. Second, if Iran fully adopts the standards due to the less-developed infrastructure, there is no guarantee of successful implementation and de facto convergence.

Original languageEnglish
Pages (from-to)58-91
Number of pages34
JournalInternational Journal of Disclosure and Governance
Volume10
Issue number1
DOIs
Publication statusPublished - Feb 2013

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Iran
International Accounting Standards Board
Developing countries
Guarantee
Developed countries
Auditing
Accounting standards
Incentives
Fair value

Keywords

  • Convergence obstacles
  • IASB standards
  • Iran

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Finance
  • Strategy and Management
  • Accounting

Cite this

Convergence obstacles with IASB standards : Evidence from Iran. / Mohammadrezaei, Fakhroddin; Banimahd, Bahman; Mohd Saleh, Norman.

In: International Journal of Disclosure and Governance, Vol. 10, No. 1, 02.2013, p. 58-91.

Research output: Contribution to journalArticle

Mohammadrezaei, Fakhroddin ; Banimahd, Bahman ; Mohd Saleh, Norman. / Convergence obstacles with IASB standards : Evidence from Iran. In: International Journal of Disclosure and Governance. 2013 ; Vol. 10, No. 1. pp. 58-91.
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