This study aims to investigate compliance with International Financial Reporting Standards (IFRS) across 87 countries from 2005 to 2023. While IFRS adoption has been widely examined, postadoption compliance remains underexplored. The author addresses this gap by offering the first large-scale global analysis of IFRS compliance and its institutional determinants.
This study follows a two-stage design. In the first stage, IFRS compliance, measured as the proportion of listed firms reporting under IFRS out of those legally required to do so, is analyzed descriptively across jurisdictions to reveal global variation. In the second stage, compliance is modeled at the firm level as a binary variable equal to 1 if a firm was legally required to adopt and reported under IFRS, and 0 otherwise. The main specification uses a firm-level logit model with errors clustered at the country and industry levels. Robustness is tested with fixed effects, generalized estimating equations, probit and generalized linear models, bootstrapping and a restricted sample of firms listed at the time of adoption.
Formal adoption often masks divergence in practice. Although 38 of 87 countries achieved full compliance, this was mostly concentrated in smaller markets. At the country–year level, fewer than half of 1,333 observations reached full compliance. Among formal institutions, enforcement exerts the strongest influence, followed by capital markets and auditors, while informal institutions such as culture also shape compliance outcomes.
Compliance data are drawn from Refinitiv, which may not always fully capture reporting accuracy or timeliness.
By shifting attention from adoption to compliance, this study identifies the institutional foundations required for genuine global comparability under IFRS.
