An Empirical Investigation on the Relationship between International Financial Reporting Standards, Political Stability and Economic Freedom, in Poor Jurisdictions

Author:Cătălina-Florentina PRICOPE, Ph. D. Student

JEL:M41

DOI:

Keywords:IFRS, poor countries, accounting harmonization, political stability, economic freedom

Abstract:
This paper examines the extent to which the degree of political stability and economic freedom can explain the decision to adopt IFRS by jurisdictions with high levels of poverty. The research hypotheses were tested on a sample of 16 jurisdictions with high levels of poverty, which have equity capital markets and have received external debt relief under programs implemented by the World Bank and International Monetary Fund. Results indicate that poor countries with high levels of economic freedom are more likely to adopt IFRS, while, surprisingly, poor countries with high levels of political stability are less likely to adopt IFRS.\r\n

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