The need for global adoption and adaptation of International Financial Reporting Standards (IFRS): post Enron consequences and the restoration of confidence to capital markets following the 2008 financial and stock market crises

摘要

Many questions have been raised as to whether financial accounting has become more conservative.The value relevance and qualitative characteristics of accounting information have become topics ofparticular relevance given the role they have assumed in influencing the value judgment of investors(local or international) in deciding whether or not to invest in a certain market. Given the quality ofaccounting information – which has resulted in misleading and inaccurate information (amongstmany other low quality attributes), it became evident, particularly following Enron's collapse, toadopt improved, enhanced, better quality standards: namely, International Financial ReportingStandards.This paper considers the background culminating in the adoption of IFRS – as well as the need forthe adoption of IFRS. It also highlights why the value relevance of accounting information is also ofvital significance in certain emerging economies and why the successful implementation of IFRS inthese jurisdictions may be crucial in restoring investor confidence – particularly in the aftermath ofstock market crashes in these economies.