Financial Accounting between Uniformity and Flexibility under International Standards

Abstract

The global accounting system has undergone a radical transformation as a result of the expansion of the application of the International Financial Reporting Standards (IFRS), which sought to establish uniform rules for the preparation and presentation of financial statements to ensure enhanced transparency, improve the quality of financial information, and strengthen the comparability of institutions across countries. However, the divergent economic, legislative and regulatory environments between countries have imposed the need for a degree of flexibility in the application of IFRS, allowing institutions to choose the appropriate accounting policies and procedures for the nature of the its activities and operational conditions. Hence, the intellectual and practical problem of how to achieve a balance between  the uniformity sought by IFRS and the flexibility imposed by the applied environment. This research aims to analyze the relationship between uniformity and flexibility under international standards, and to show the impact of this balance on the quality of financial information. The research also reviews the research gap in the previous literature and presents a research model that illustrates the mutual effects between the implementation of IFRS and the level of standardization, flexibility, and quality of financial information.