The Impact of Adopting International Financial Reporting Standards and Public Sector Standards on Economic Freedom

Articles in Press

Document Type : Original Article

Authors

mohammad iraji

Reza Hesarzadeh

Department of Accounting, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Iran

10.22067/ijaaf.2026.95895.1596

Abstract

This study examines the impact of adopting International Financial Reporting Standards (IFRS) and International Public Sector Accounting Standards (IPSAS) on economic freedom in developing countries. The analysis utilizes a panel dataset encompassing 32 developing economies across Latin America, Asia, Eastern Europe, and Africa, specifically including Albania, Argentina, Bangladesh, Brazil, Chile, Mexico, Turkey, and South Africa, over the period from 2000 to 2023. Enhancing economic freedom is crucial for fostering a better business environment, attracting foreign investment, and promoting sustainable economic growth. A panel data regression approach was employed, utilizing internationally recognized economic and financial databases. The empirical findings indicate that the adoption of IFRS, as well as the concurrent adoption of both IFRS and IPSAS, has a statistically significant positive effect on economic freedom. The results suggest that implementing IFRS and IPSAS together can bolster financial transparency, improve institutional quality, enhance investor confidence, and ultimately contribute to higher levels of economic freedom in developing nations. In conclusion, this study advocates for financial regulators, economic policymakers, and international organizations to recognize the adoption of IFRS and IPSAS as effective policy tools for advancing economic reforms and enhancing the performance and integrity of financial markets.

Keywords

International Financial Reporting Standards

Economic Freedom

Developing Countries

International Public Sector Accounting Standards

Subjects

• Accounting

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