The Socio-Economic Impacts of the Adoption of IFRS: A comparative study between the ASEAN countries of Singapore, Malaysia and Indonesia

This paper concerns a qualitative study of the socio-economic impacts of the convergence of local accounting standards with IFRS for companies on the ASEAN countries of Singapore, Malaysia and Indonesia. A qualitative methodology comprising a series of one-to-one interviews conducted in the three countries is used to answer the key questions about the impacts of IFRS. Perspective of institutional theory is utilised in the analysis. The findings for Singapore reveal a progressive adoption of IFRS since 2005, however the complexity of the principles-based 'fair value' requirements of IFRS harmonised into the local standards (as in Malaysia and Indonesia) has impacted confidence. The IFRS costs are a concern as was evidence of an increased momentum of inward foreign investment. Malaysia and Indonesia officially adopt IFRS in 2012. There is a prediction of positive impacts, such as inward investment attraction. There is tension and debate with regards to the accounting standards for financial instruments, real estate and agriculture. There is disquiet in both Malaysia and Indonesia about authorities not taking into account cultural, religious and societal variations around the globe. Indonesia is divided by the sensitive issue of whether IFRS and Shari'a Law principles can be reconciled.