IFRS AND ECONOMIC IMPACT ON EARNING MANAGEMENT SYSTEM OF CORPORATE SECTORS BEFORE AND AFTER ADOPTION: A COMPARATIVE STUDY OF THE LISTED COMPANIES

The present paper involves the study of the conversion of the corporate reporting from the National accepted GAAP principles to IFRS standards as to what changes it makes on the earning management system that is the financial statement of the companies and how does it affect the companies economically and what significant change has the reporting resulted in before and after adoption. Basically, the IFRSs were made to create a common business language amongst different countries and had introduced harmonization so that the investors could invest money cross-borders without much complication on contemplating of the reporting standards. So, with this view the companies would have to comply with certain global principles but, changing the way of reporting demands the change in the entire accounting procedures from the accountants, who would prepare the financial statements to auditors to give assurance to investors whose economic decisions will be affected. So, such a huge change would demand personnel proficiency update which would have impact on the company economically and the impact of IFRS adoption on the retained earnings and difference that arise known as the “GAAP GAP” on the equity management before and after adoption.