The Impact of International Accounting Standards Adoption on Global Economic Integration(Subject Review)

Abstract

The current review attempts to assess the interaction between the adoption of International Accounting Standards and global economic integration. With the increase in integration and interdependence of capital markets, the standardization of accounting standards has become an important factor that makes international investments efficient. The current review analyzes the existing literature on the issue at hand – the influence of the use of International Financial Reporting Standards (IFRS) and its impact on capital markets integration, economic growth, and corporate governance. Both theoretical and empirical aspects of accounting standardization are discussed, taking into account the difficulties that can be faced while implementing these standards. Thus, future research should try to widen the geographic range and include empirical data gathered using such research methods as case study analysis in order to obtain more detailed information regarding IAS adoption. The conclusion is that the IAS standards contribute to global economic integration greatly, but there still is some

work to be done to achieve complete harmonization.