Efficacy of priniciple based accounting on internal governance and financial performance
The introduction of IFRS has fuelled the expectation of users of financial newlinestatements on the potential benefits of adoption. Studies have indicated the newlinebenefits of IFRS adoption such as higher comparability of financial statements among companies operating in different jurisdictions, reduces transaction costs, and access to international capital through cross border listings and greater foreign investment (Aharony, Barniv and Falk, 2010 and newlineDunne, et al. 2008). Several studies have been done to analyze the consequences of IFRS adoption on financial statement items (Lantto and Sahlstrom, 2009; Dunne et al. 2008). Most of these studies were restricted to European countries and some Australian and Canadian countries as they were the early adopters. India has planned to converge with IFRS and not adopt. Adoption means applying IFRS as issued by IASB. Convergence means India would newlineharmonize its national accounting standards in compliance with IFRS as this provides freedom to protect the local business environment. These harmonized accounting standards are notified by Ministry of Corporate Affairs and are called Ind AS. As on date 39Indian accounting standards newlineharmonized with IFRS has been notified by Ministry of Corporate Affairs newline(ICAI,2015a). A road map for convergence with IFRS was notified by Ministry of newlineCorporate Affairs in a phased manner effective April 2011 (MCA, 2010). newlineAs the deadline was not met due to various reasons, a revised notification newlineand implementation roadmap has been issued by MCA in Feb, 2015 recommending Indian Companies with a net worth of over Rs. 500 Crore to converge with IFRS with effect from 1st April 2016 (ICAI, 2014; MCA,2015). newlineThe Finance Minister had also in his budget speech of 2014-15, indicated that Indian companies have to report IFRS voluntarily from 2015-16 and mandatorily from 2016-17 to make financial statement of Indian Companies newlinecomparable to 120 countries which are already reporting and also to fulfill the commitment made to G20 nations.