The Responses of Malaysian Public Listed Companies to the IFRS Convergence

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Soon Yeow Phang
Nurmazilah Mahzan


As the Financial Reporting Foundation (FRF) and Malaysian
Accounting Standard Board (MASB) announced their plan to bring
Malaysia to full International Financial Reporting Standards (IFRS)
convergence by 1 January 2012, it is envisaged that Malaysian
public listed companies will be prepared for the IFRS convergence.
Our study was carried out during the peak of the convergence
preparation in Malaysia. We aim to identify external drivers that
influence the preparedness of companies for IFRS convergence
by applying institutional theory perspectives as well as examine
internal barriers that may impede the implementation of IFRS
through the lens of a resource-based view. Of 859 questionnaires
sent out, a total of the 150 responses were used in the data analysis
of this study contributing a usable response rate of 17.46%. The
general results show that respondents are prepared for the IFRS
convergence. Our findings specifically reveal that the majority of
respondents agree that coercive forces from stakeholders, especially
regulatory forces influence their preparedness to implement IFRS.
Additionally, this study points to the important roles of national
accounting regulators and external auditors in influencing the
degree of preparedness for IFRS convergence. The findings further
demonstrate that it is not an easy task to implement IFRS and hence
proper preparatory actions taken by companies are necessary in the
convergence process. Overall, this study contributes to the research
study’s gap of limited exploration study on the IFRS adoption at
organisation field from institutional theory perspectives, as previous
institutional research focused on isomorphism influence on the IFRS
adoption at the national level perspectives. Further, this study uses a resource-based view to explore the responses of companies for full
convergence with IFRS. Hence, this study contributes to literature
on IFRS adoption by offering insights into the internal barriers faced
by companies in the IFRS convergence process. From a practical
standpoint, this study provides several implications for accounting
regulators, standard setters, external auditors and Malaysian public
listed companies.


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