Role of culture and law enforcement in determining the level of IFRS adoption

Abstract

This article investigated why IFRS adoption was in fact implemented differently in many countries around the world. We proposed two possible variables to determine a country adopting IFRS, in terms of cultural and law enforcement. We also proposed a measurement model of IFRS adoption level. We predict and find that countries with a high power distance level are likely to have low IFRS adoption level, and countries with a high law enforcement level are likely to have high IFRS adoption level.