The Korea Accounting Institute (KAI) has been responsible for matters relating to accounting standards since the Financial Services Commission (FSC) delegated the duty of setting, amending and interpreting accounting standards to the Korea Accounting Standards Board (KASB) nested within the KAI in accordance with the Act on External Audit of Stock Companies and Enforcement Decree of the Act.
Korea adopted IFRS in full in 2011 to enhance its accounting transparency and thus resolve the so-called Korea Discount issue. However, even after five years of IFRS adoption, international organisations such as the International Institute for Management Development (IMD) and World Economic Forum still rank Korea very low in terms of accounting transparency. Against the backdrop, the KASB requested an outside research team consisting of Prof. Minsup Song of Sogang University and Prof. Joonhee Jung of Daegu University to carry out a research project which reviews the changes in qualitative properties of accounting information and assesses the economic impact therefrom by comparing before and after the IFRS adoption.
In particular, this study compares before and after the IFRS adoption to find out whether there has been any change in relation to preparation of accounting information in practice; whether there has been any change in terms of the quality of accounting information; whether there has been any fundamental change in the relevance and faithful representation aspects of the Conceptual Framework; whether there has been any change in the evaluation and awareness of accounting information among market participants; and whether the international comparability and reliability have increased after the adoption, by examining empirical research literatures on IFRS adoption that have been conducted during the last five years and performing additional empirical analyses.
You can find this research paper on the KASB’s website (www.kasb.or.kr). If you have any comments on the paper, please send them to the KASB by mail or email to firstname.lastname@example.org.
Please note that the views expressed in this paper are those of the researchers specified above and do not necessarily represent the official views of the KAI or KASB. Also, I would like to express my heartfelt thanks to all those who were involved in this research project for their effort and passion.
Jee In Jang, Ph.D.
Chair and CEO
Korea Accounting Institute
Korea Accounting Standards Board