The adoption of IFRS around the world is occurring rapidly to bring about accounting quality improvement through a uniform set of standards for financial reporting. But recent accounting literature provides the evidence that at least part of the observed quality improvements around voluntary adoption is driven by the changing incentives rather than the standards per se. This article is an effort to review the research on the consequences of changing accounting standards and to portray the determinants financial reporting outcomes following IFRS adoption. We argued that, financial reporting outcomes depends on a variety of factors that influence those outcomes and accounting quality does not depend only on accounting standards but also on the firm’s overall institutional setting, including the legal and political system of the country in which the firm resides. Thus other factors like incentives, enforcement mechanism, ownership structure, capital structure, market and legal forces and cost benefit trade off deserves equal importance as adoption of IFRS. IFRS has an effect on accounting quality but adoption of IFRS is actually a manifestation of other underlying factors. We also highlighted the issues that are hindering contribution of IFRS adoption as a determinant of financial reporting outcomes in Bangladesh.

show more