Institutional theory and IFRS: an agenda for future research

Abstract

The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. AbstractThis paper highlights the capacity for Institutional Theory [IT] to render in-depth understanding of change processes associated with the adoption and implementation of international accounting standards by countries and organizations. Although the fact of requiring the adoption of IFRS could be characterized as a form of coercive power, recent developments in IT help to explore the extent to which adoption and diffusion of IFRS is shaped by three factors: agency, the interests of actors involved in the adoption process, and the role of institutional entrepreneurs and institutional work. We provide a structured review of literature that uses an IT framework in the context of adopting and implementing IFRS. The review brings together various streams of IT and current debates in the management and organization literature. This allows us to outline an agenda for future research that proposes six new research questions for investigation. These research questions are intended to encourage greater regard for the capacity of the theoretical toolkit of institutional logics to explore institutional entrepreneurship, institutional work, and the institutional dynamics of change processes associated with the adoption, maintenance and disruption of accounting systems.

Investigating IFRS compliance in transitioning countries: A qualitative study

“…On the other hand, researchers employing qualitative methods use questionnaires, surveys and interviews with academics, regulators, audit professional, financial managers and other relevant actors to investigate compliance (Ballas et al 2010;Nurunnabi, 2015;Uyar et al, 2016). Moreover, Guerreiro et al (2020) call for more research under an institutional-based approach to shed more light on the complex IFRS processes and practices.…”

“…Institutional theory is a vast theoretical field, widely employed in management and organizational studies to explain change and organizations. Given the complex organizational processes around IFRS implementation and practice, Guerreiro et al (2020) emphasize the importance of this theoretical stance in conducting IFRS studies, and call for future research in the area. Moreover, our theoretical choice is informed by previous literature on emerging economies.…”

“…We therefore place our analysis at three levels: political and economic, organizational field, and organization. This allows us to conduct a more in-depth analysis, without privileging one level (Guerreiro et al, 2020), since the framework presents "institutionalization as a process recognized as political, reflecting the relative power of organized interests and the actors who mobilize around them" (Dillard et al, 2004: 510). Dillard et al (2004) present the economic and political level as the societal field providing the infrastructure, the laws, regulations, and acceptable codes of conduct.…”

“…In their review of IFRS studies in emerging economies, Samaha and Khlif (2016) find very few studies investigating compliance with IFRS, with mixed results. Therefore, we respond to recent calls (Guerreiro et al, 2020) to employ institutional theory in investigating the IFRS practices. This paper is organized as follows: Section 2 comprises the literature review; Section 3 -the context for IFRS in Romania, pharmaceutical industry in Romania and IFRS within this industry; Section 4 briefly introduces the theoretical framework; Section 5 describes the methodology employed for our research; Section 6 presents the results obtained and the last part synthesizes the conclusions.…”

“…Dillard et al (2004) advance that institutional pressures reside at the political and economic level, organizational field, and organizational level. Guerreiro et al (2020) emphasize the importance of this approach in studying the implementation of IFRS and the resulting accounting practices.…”