IFRS Adoption and Financial Reporting Quality: A Review and Future Research Agenda

Over the past two decades, International Financial Reporting Standards (IFRS) have attracted considerable research attention because of their potential to improve reporting quality, constrain earnings management, and influence borrowing costs. However, empirical evidence remains mixed, particularly across emerging economies where institutional structures, regulatory systems, and enforcement mechanisms differ from those in developed markets. This study addresses these inconsistencies through a systematic review of 92 peer-reviewed empirical studies published between 2012 and 2025 in accounting, finance, and banking. The studies were identified from Scopus, Google Scholar, and Web of Science to synthesize existing evidence, explain divergent findings, and identify areas for future research. The review produces three main findings. First, IFRS adoption generally improves earnings quality and reporting transparency, thereby strengthening lender confidence, although its direct effect on borrowing costs appears limited. Second, greater reporting reliability enhances the overall quality of accounting information and contributes to institutional trust. Third, creditors appear to place greater emphasis on the overall credibility and reliability of financial reporting than on earnings quality alone when making lending decisions. The findings suggest that regulators should strengthen IFRS implementation, expand professional training, and encourage transparent reporting practices. Financial institutions should also incorporate broader accounting quality indicators into credit assessments. Theoretically, the study demonstrates the complementary relevance of Agency Theory, Signaling Theory, and Decision Usefulness Theory in explaining IFRS outcomes. By integrating these perspectives, the review highlights how IFRS adoption can strengthen reporting credibility, stakeholder trust, and financial stability in emerging markets.