LARGE-SCALE IFRS IMPLEMENTATION AND BANK PERFORMANCE: AN EMERGING ECONOMY PERSPECTIVE

Abstract

International Financial Reporting Standards (IFRS) are largely contributing to accounting quality improvement around the world. Since its first mandate in European countries, over 100 countries are now complying with the IFRS in their financial reporting practices. To date, plenty of research initiatives have been undertaken to examine the diverse impacts of IFRS from different perspectives. However, there remains a paucity in examining the changes in firm performance resulting from IFRS adoption, especially in the banking sector. Therefore, this study aims to evaluate the impact of IFRS adoption on financial performances of commercial banks. Compiling panel data of 13 commercial banks listed in Dhaka Stock Exchange, an Ordinary Least Square (OLS) estimate has been administered. The empirical result of the study shows a strong relationship between the large-scale IFRS implementation and commercial banks’ financial performance. The findings of the study contribute to the IFRS literature by exposing the relationship between large scale IFRS implementation and bank performance from an emerging economy perspective. The study also recommends required country-specific strategic considerations in adopting and implementing IFRSs.