THE IMPACT OF IFRS ADOPTION ON CORPORATE TRANSPARENCY AND INVESTOR CONFIDENCE

Abstract

This study aims to understand how the adoption of International Financial Reporting Standards (IFRS) impacts corporate transparency and investor trust. The primary focus is to identify the relationship between global financial reporting standards implemented through IFRS and the improvement in financial reporting quality as well as investors' perceptions of companies. The methodology used is a literature review, with data collected from scholarly articles, official documents, and other credible sources. Articles were selected based on their relevance and credibility, particularly from nationally accredited journals, published between 2019 and 2024. The analysis explores key findings in the literature related to the effects of IFRS adoption on financial reporting and its influence on investor trust. The findings reveal that IFRS adoption significantly enhances corporate transparency. These global reporting standards provide a clearer and more comparable framework, enabling investors to better assess corporate performance. Additionally, investor trust increases as they gain greater confidence in the reliability of financial information presented. However, the study also highlights challenges such as implementation costs and the adaptation to local accounting cultures. This research offers valuable insights for companies, regulators, and other stakeholders in understanding the benefits and challenges of IFRS adoption and provides directions for further studies in this field.