The IFRS’ Impact on Financial Reporting as well as the Asymmetry of Financial and Accounting Information

The mandatory adoption of IFRS represents an exogenous change in information asymmetry. As IFRS adoption is determined at the individual country level, it is less likely to reflect the endogenous preferences of a single entity. The asymmetry information redundance arises from three potential causes: for some countries, the IFRS increases accounting awareness substantially by providing additional reporting guidelines, such as segment reporting; it considerably increases comparability between countries, which facilitates monitoring and benchmarking between entities and produces a number of contemporary changes related to the implementation of new standards that have helped to reduce information asymmetry in their adoption. The IFRS’ conceptual content confirms that there is a convergence between the objectives and guidance of accounting standards, on the one hand, and the objectives and guidance of corporate governance requirements, on the other hand.