The Impact of IFRS Adoption on Financial Transparency

Abstract

International Financial Reporting Standards (IFRS) have been introduced as a crucial tool for enhancing financial transparency and improving the quality of financial reports globally. The adoption of these standards has had positive effects on financial transparency and investor confidence in various countries. This study aims to examine the impact of IFRS adoption on financial transparency and analyze the challenges and benefits associated with its implementation in different financial systems. This research employs a descriptive-analytical method, drawing on a review of previous studies and research on the effects of IFRS. The data includes credible scientific articles and financial reports from various countries, examining the changes in financial transparency before and after IFRS adoption. The findings indicate that IFRS adoption has had positive effects on increasing financial transparency, improving the quality of financial information, reducing information asymmetry, and strengthening investor confidence. Additionally, the comparability of financial reports at the global level has improved. However, challenges such as high costs and the need for adequate infrastructure for implementation exist. IFRS adoption is recognized as an effective tool for improving financial transparency and enhancing trust in financial markets. Although its implementation comes with challenges, the long-term benefits of IFRS, such as improved financial performance and attracting more investments, are evident. Providing proper infrastructure and training personnel can facilitate the implementation of these standards.