Review Article:
1.0. Introduction
International Financial Reporting Standards is the set of principles for preparing financial reports defined by the International Accounting Standards Board (IASB). It defines the principles in order to provide companies with a universal scale of preparing their reports. In certain situations, it is considered a dual-edged sword with both its merits as well as demerits from different perspectives (Damant, 2006). Currently, the government of India aims to replace its old structure of financial reporting with the enforcement of IFRS. This paper aims to critically review the research report titled as “IFRS in India: Challenges and Opportunities”, written by Srivastava and Bhutani (2012).
2.0. Clearly Stated but Redundant and Incomplete Objectives
Aims and objectives are clearly stated and comply with the core purpose of the study and learning outcomes that makes them ideal in terms of composition of a research paper (Thomas, and Hodges, 2010). However, they need to be cut down to three instead of four in number. Second and third statements are redundant. In the third bulleted point the authors have expressed the intention to study the challenges regarding the implementation of IFRS rules in India, which had already been covered in the second statement (i.e. refer to the word “hindrance”).However, the writers should be credited for including the recommendations towards smooth implementation of the underlying financial rules by exploiting all the opportunities and avoiding hindrances.
Furthermore, there should also be another objective incorporated in it, and it is whether or not it will lead to a transparent and reliable mechanism. Despite the fact that IFRS is a refined and globally acceptable system of financial standards, it is not necessary that firms and corporations will adopt fair policies while preparing their financial reports and may understate or exaggerate certain details for financial benefits (Damant, 2006). Therefore, it would have been tactful to include a question in the firsthand study regarding transparency, which would have latter been justified or unjustified by linking it to secondary research on this issue.
3.0. Lack of Critical Insight
It is good that the authors have picked some authentic and relevant papers to scan the existing literature, but certain issues can be identified with it by even having a quick critical look. For example, it is not sufficient to describe what a paper is about as the author did while referring to the research of Armstrong et al. (2010) and Daske et al. (2007). No further attempt has been made to describe or critically analyse the findings of these authors. There is only the description of the key areas covered by them. Therefore, the review lacks in-depth critical approach to the subject matter, which needs to be an essential attribute of any quality review of literature as recommended by Galvan (1999), and Soles (2010) in their books dealing with the essentials of research-based writing.
Furthermore, this section is also not of an ideal length. As compared, it is smaller even than conclusion. It should have been one of the major parts of the study, as it provides justification for the study being undertaken. By the same token, it also serves as base for critical data analysis (Soles, 2010). Furthermore, there is absence of insightful cross references. It would increase the quality if the author also selects some studies that throw light on the external environmental factors besides political scenario that may affect the implementation of IFRS in India. For example, Damant (2006) is of the view (in the initial part of his study) that the difference between common law and civil law is challenging to the internationalised accounting standard in Europe. India claims to be the biggest democratic state. So it will be essential for the government to take the majority of the relevant group of people (auditors, traders, financial analysts, and others) into confidence prior any decision (European Parliament, 2014).
4.0. Overly Estimated Value of Research
A research design, at its base, must be capable of addressing the research questions and key objectives (Salkind, 2010). However, the writer of this paper stands in disagreement with the author that the sample population is too small in size. In case of IASB, research does not matter to large extent. It is a generalised fact that the world is greatly influenced by globalisation and IASB provides some standards to shape the financial matters parallel to this unavoidable trend.Hence, it is the matter of simplifying and universalising the financial reporting, which is a solid idea at its base. Therefore, even a population size of 150 participants (as in present case) is quite appropriate to the nature of the matter being researched.
Nevertheless, the issue regarding this is that mostly the respondents belong to the category of post graduate and postgraduate (62%), while only 38% responses have been collected from professionals, which is the most reliable category of the participants. Majority of the sample population consists of youngsters that are very unlikely to have solid grip on wider scope of financial standards and their functions (though they claimed otherwise). However, it can be made better without the need of revising primary research by expanding the secondary research (as suggested above), and verifying the findings of the firsthand research in its light (Collins, 2010).
5.0. Detachment between Primary and Secondary Findings
The Findings and Discussion chapter is quite appropriate to the research aims and objectives. However, regarding the first three questions, results lead to a confusion, which should have been pointed out by the authors. For examples, at first, the majority of the participants claimed to have the knowledge of accounting standards. Then, they pointed out that the majority of employees in the company were not aware in this regard and they did not know much about the content of new IFRS. It puts the question mark on the reliability of the answer to the first question.
The later part of discussion perfectly provides the base to outline the hindrances in comparison to the opportunities relating to the implementation of new financial standards in India. But, the basic flaw identified in this phase of the study is that it is not linked to the literature review, which could have added to the reliability of the firsthand data itself (The Ohio State University, 2015). Hence, the discussion and analysis can be made effective only by justifying it on the scale of secondary research.
6.0. Over-Expanded Conclusion but Incomprehensive Approach to Recommendations
Two major issues with the conclusion are its length and generality. However, the length can be justified if it deals with the specific concerns and takeaways arising from the whole discussion. For example, its initial part, at the length of 50% of the whole conclusion, deals with general benefits relating to the application of the proposed financial standards with no reference to India. A good conclusion must be covering the insight gathered from the study i.e. how it addresses the key objectives and/or what clues it provides for future learning (Truscott, 2007; Osmond, 2013; Markman, Markman, and Waddell, 2001; Null, and Lorseyedi, 1998). The author has discussed how globalisation is intensifying the need for IFRS and GAAP, and how western countries are enjoying its advantages, which is not the core purpose of the study and could have ideally been stated in the initial part of introduction.
The later part of the conclusion throws good light on the obstacles relating to the implementation of the IFRS in India and the degree of unawareness about it on organisational level. Still, it can be improved by adding some of the opportunities allowing the state to implement these standards. Later 50% part, however, seems to be integral and it is ideal to boil down the whole conclusion to this section by making aforementioned amendment. As for recommendations, in their most refined form, they need to be specific to the objectives of the study (Meyers, 2013; Blandford, 2009; Spalding, 2005).
However, first and third recommendations are not only redundant, but also general in nature. Furthermore, they do not link to the root. For example, it is given that the government should show commitment towards the enforcement of new standards without specifying any course of action for the government. It is better to recommend that the government should bring policies to spread awareness through education and other measures to enlighten and form the public opinion on the matter. Furthermore, the government should devise policies to keep incremental costs under-control that the companies fear to incur after the implementation of IFRS. Some of the cost-effective policies need to be introduced for this purpose. By adding these recommendations, this part of the study can be made more comprehensive.
7.0. Other Issues
Even though some parts of the study are very informative, they are not supported by appropriate references, as in case of introduction (not referred at all), and the general part of conclusion (discussed above). No authentic resource has been included to justify the phrase, “The evolution of IFRS is the biggest revolution in the accounting world”. It is better to replace “the biggest” with “one of the biggest” to make it less objectionable without a resource. Furthermore, there is no proper scheme to make distinction between the headings and subheadings which is key to clear writing (Hartley, and Sydes, 1996; Findlay, 2014).It can be fixed by italicizing the latter. At times, it lacks transition and makes sudden switches from one point of the study to another. The best example of it is the very second line the “Literature Review” (i.e. “According to). The authors begin the section as if they had aimed to describe the purpose of writing literature review at brief length, but make a contrary move after the introductory line. Another example of lack of flow and inconsistency can also be observed in the following four statements (not knit together well):
8.0. Conclusion
Even though the paper is exposed to some flaws as identified in this critical review, it is sound while judged on linguistic scale. Small revisions and minor corrections (as suggested) can improve the intellectual quality of it. However, the major change required to be done is the expansion of literature review and making the primary data analysis mirror the findings of the secondary research.
References
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