DETERMINANTS OF VOLUNTARY INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTION: A COMPREHENSIVE LITERATURE REVIEW

Abstract

The mandatory adoption of International Financial Reporting Standards (IFRS) has been enforced for companies across numerous countries worldwide since 2005. The choice to adopt IFRS brings significant benefits, specifically: improving the quality of financial reporting information, enhancing competitiveness, international integration in the global market; and improving business performance, (Tran et al., 2019). This study aims to elucidate the determinants influencing the voluntary adoption of IFRS. Through a systematic literature review and synthesis of prior studies, our findings indicate that the factors affecting firms' voluntary and readiness-based IFRS adoption can be categorized into four groups: firm characteristics, capital structure, internationalization activities, and corporate governance. Beyond providing a comprehensive assessment of existing research in this domain, this paper serves as a valuable resource for scholars interested in IFRS adoption by enabling them to synthesize and compare findings across studies. Additionally, it highlights potential avenues for future research on voluntary and readiness-based IFRS adoption.