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Mandatory International Financial Reporting Standards Support among Trading Companies in Los Angeles: An Analysis

Author

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  • Walid M Masadah
  • Ahmed Al-Omush
  • Fadi Shehab Shiyyab

Abstract

The study quantitatively investigated the factors influencing the support for a mandatory transition to the International Financial Reporting Standard (IFRS) by grouping survey data as critical driving factors (benefits) and critical inhibiting factors (obstacles). A strong correlation was found between the level of support, and the benefits, suggesting that the support for IFRS depends on awareness and perceptions about key benefits- ease of financial reporting, transparency, and costs reduction compared to GAAP. Two key obstacles found are the cost and the complexity of transition. Awareness and perceptions about IFRS differ significantly according to scope of business operation. National only companies (NOCs) are not enthusiastic about the advantages of IFRS compared to National and International Companies (NAICs). This study concludes that the advantages of IFRS surpass the disadvantages signifying a greater support. It shows there is a greater possibility for a U.S. mandatory transition to IFRS comes 2015. Further studies are recommended on the effectiveness of the IFRS Adoption Prediction Model (IAPM) that resulted from this study.

Suggested Citation

  • Walid M Masadah & Ahmed Al-Omush & Fadi Shehab Shiyyab, 2015. "Mandatory International Financial Reporting Standards Support among Trading Companies in Los Angeles: An Analysis," Business and Economic Research, Macrothink Institute, vol. 5(1), pages 97-116, June.
    • Handle: RePEc:mth:ber888:v:5:y:2015:i:1:p:97-116
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    References listed on IDEAS

    as
    1. Holger Daske & Luzi Hail & Christian Leuz & Rodrigo Verdi, 2008. "Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences," Journal of Accounting Research, Wiley Blackwell, vol. 46(5), pages 1085-1142, December.
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    More about this item

    Keywords

    International; Financial; Reporting; Standards; Support; Trading; Benefits; Obstacles;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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