The Economic Implications of IFRS Adoption on Disclosure Practices and Accounting Quality

Simi Anto, Dr. Bhupendra Bahadur Tiwari

Abstract: This paper explores the economic implications of adopting International Financial Reporting Standards (IFRS) with a particular focus on its effects on disclosure practices and accounting quality. Using data from 50 listed Indian companies across three key periods pre-adoption (2014), transition year (2016), and post-adoption (2018 we analyze key financial indicators such as Return on Assets (ROA), Return on Equity (ROE), Debt-to-Equity Ratio (D/E), and Earnings Per Share (EPS). Additionally, a 10-point Disclosure Quality Index (DQI) was used to assess the depth and transparency of financial disclosures. The findings show significant improvements in financial performance post-IFRS adoption, particularly in profitability indicators and disclosure quality, which suggest that IFRS adoption has contributed to enhanced transparency and better financial reporting practices.

Keywords: IFRS, Accounting Quality, Value Relevance, Financial Performance, AIS, Diffusion of Innovation Theory, Earnings Management