Institutionally Speaking, are Global Standards Adoptable in a Given Jurisdiction? A Critical Analysis of the IFRS's Use in Ukraine through the Lens of New Institutional Accounting

Authors

  • Oleh Pasko
    Affiliation

    Department of Accounting and Taxation, Faculty of Economics and Management, Sumy National Agrarian University, Herasyma Kondratieva Street 160, 40000 Sumy, Ukraine

https://doi.org/10.3311/PPso.17262

Abstract

This paper examines the consequences of International Financial Reporting Standards (IFRS) adoption in Ukraine through the lens of New Institutional Accounting theory. IFRS adoption's effects on management's reporting incentives, enforcement and institutional complementarities are analysed. I find that adoption at a technical level is not enough to be called "adoption" as profound changes at the institutional level are also required. Adopted IFRS are subjected to the same type of institutional and market pressures that gave rise to the old set of standards and as a result, the practice of financial reporting is unchanged at its core while only new technical rules apply. Hence, jurisdictions should not pursue only technical adoption but should also try their best to align as close as possible all institutional aspects of this issue. The best advice for all jurisdictions with an institutional infrastructure similar to Ukraine's is to strengthen management's reporting incentives and enforcement mechanisms.

Keywords:

new institutional accounting, management’s reporting incentives, enforcement, institutional complementarities, IFRS, adoption, institutions

Published Online

2022-01-03

How to Cite

Pasko, O. (2022) “Institutionally Speaking, are Global Standards Adoptable in a Given Jurisdiction? A Critical Analysis of the IFRS’s Use in Ukraine through the Lens of New Institutional Accounting”, Periodica Polytechnica Social and Management Sciences, 30(1), pp. 36–48. https://doi.org/10.3311/PPso.17262

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Section

Articles