This paper systematically reviews the literature on International Financial Reporting Standards (IFRS) adoption strategies and economic outcomes in the MENA region. It aims to explain why countries in the region exhibit divergent IFRS adoption paths, identify the main benefits and limitations of harmonisation, and explore the factors influencing adoption success.
This study employs a systematic literature review (SLR) methodology to analyse 159 academic publications, with a focus on the cultural, political, and institutional perspectives that help explain the variation in IFRS adoption strategies across MENA countries. The review also evaluates the key challenges that hinder the realisation of the anticipated benefits associated with the adoption process. Additionally, a bibliometric analysis was co-employed to uncover thematic patterns and trends within the existing literature.
The reviewed literature provides evidence that institutional pressures promote the IFRS adoption in the region. However, political dynamics, cultural norms, and Islamic finance often lead to partial adoption or to adoption with substantial modifications. Such adaptations tend to constrain the potential positive effects of IFRS adoption, which remain highly contingent on broader institutional reforms beyond financial reporting. Moreover, initial benefits often diminish over time due to persistent political and economic instability.
This paper offers a comprehensive, context-specific synthesis of the adoption of IFRS in the MENA region. Institutional and cultural theories are applied to explain cross-country differences in both IFRS adoption strategies and adoption outcomes. Based on the findings of the SLR, we propose a structured future research agenda focusing on regulatory adaptations, political developments, and the interaction between IFRS and Islamic finance.
