Stated Preferences for the Adoption of IFRS and UK GAAP: Case Study Vignettes

Main Article Content

Yu-Lin Hsu
Gavin C. Reid


Our aim is to see if the adoption of International Financial Reporting Standards (IFRS) is beneficial. Our methodology involved both quantitative methods (with non-parametric tests) and qualitative methods (with case study vignettes) in a complementary way, as in the ‘mixed method’. Our objective was to use a formal metric, adapted from economic choice theory, to analyze choosing behavior in firms over financial reporting standards, using calculated ratio and net utilities. Our evidence and analysis are based on a random sample of twenty-one UK firms. From these firms, primary source data were collected, using questionnaires and fieldwork interview tools, to enable the testing of our hypothesis that the adoption of IFRS was beneficial. Using robust non-parametric statistical tests, we found that public firms which had to adopt IFRS, as a matter of necessary policy compliance, often perceived this imposed choice to be unbeneficial, refuting our null hypothesis. This finding is highly statistically significant. The implication of our qualitative evidence was that this perception of lack of benefit in adopting IFRS created a voice for regulatory change.

accounting standards, stated preferences, fieldwork, decision analysis

Article Details

How to Cite
Hsu, Y.-L., & Reid, G. C. (2021). Stated Preferences for the Adoption of IFRS and UK GAAP: Case Study Vignettes. Asian Journal of Economics, Business and Accounting, 21(4), 20-30.
Original Research Article


PWC. Summary of key differences between old UK GAAP, new UK GAAP (FRS 102) and IFRS; 2015. Accessed: 1 January 2017 Available:

Collis J, Jarvis R, Skerratt L. The role and current status of IFRS in the completion of national accounting rules–Evidence from the UK. Accounting in Europe. 2017;14(1-2):235-247.

Bryant WDA. Advanced Microeconomics: theory, applications and tests. Singapore: World Scientific; 2021.

Reid GC, Smith JA. Practitioner views on financial reporting for smaller entities. CRIEFF Discussion Paper, School of Economics & Finance, University of St Andrews. 2007;0701.

Reid GC, Smith JA. Reporting in small firms. Financial Management. 2007;31-33.

Schipper K. How can we measure the costs and benefits of changes in financial reporting standards? Accounting and Business Research. 2010;40(3):309-327.

Watts RL, Zimmerman JL. Towards a positive theory of the determination of accounting standards. The Accounting Review. 1978;53(1):112-134.

Meeks G, Swann GP. Accounting standards and the economics of standards. Accounting and Business Research. 2009;39(3):191-210.

Fox A, Hannah G, Helliar C, Veneziani M. The costs and benefits of IFRS implementation in the UK and Italy. Journal of Applied Accounting Research. 2013;14(1):86-101.

Bamber M, McMeeking K. An examination of international accounting standard-setting due process and the implications for legitimacy. British Accounting Review. 2016;48(1):59-73.

Nobes C. The continued survival of international differences under IFRS. Accounting and Business Research. 2013;43(2):83-111.

Franks JR, Schaefer SM, Staunton MD. The direct and compliance costs of financial regulation. Journal of Banking & Finance. 1997;21(11-12):1547-1572.

Gordon MJ. Postulates, principles and research in accounting. The Accounting Review. 1964;39(2):251-263.

Ben Amar W, He L, Li T, Magnan M. The corrosive effect of offshore financial centers on multinational firms’ disclosure strategy. European Accounting Review. 2019;28(3):483-512. PWC. IFRS adoption by country; 2011. Accessed: 30 July 2018. Available:

Fields TD, Lys TZ, Vincent L. Empirical research on accounting choice. Journal of Accounting and Economics. 2001;31(1-3):255-307.

Collis J, Holt A, Hussey R. Business accounting. 3rd ed. London: Palgrave; 2017.

Brüggemann U, Hitz JM, Sellhorn T. Intended and unintended consequences of mandatory IFRS adoption: A review of extant evidence and suggestions for future research. European Accounting Review. 2013:22(1):1-37.

Christensen HB, Lee E, Walker M, Zeng C. Incentives or standards: What determines accounting quality changes around IFRS adoption? European Accounting Review. 2015;24(1):31-61.

Daske H, Hail L, Leuz C, Verdi R. Adopting a label: Heterogeneity in the economic consequences around IAS/IFRS adoptions. Journal of Accounting Research. 2013;51(3):495-547.

Gwilliam D, Macve R, Meeks G. The costs and benefits of increased accounting regulation: a case study of Lloyd's of London. Accounting and Business Research. 2005;35(2):129-146.

Tashakkori A, Teddlie C, editors. Handbook of mixed methods in social and behavioral research. Thousand Oaks (CA): Sage Publications Ltd; 2003.

Graham JR, Harvey CR, Rajgopal S. The economic implications of corporate financial reporting. Journal of Accounting and Economics. 2005;40(1-3):3-73.

Gillham B. Developing a questionnaire. London: Continuum; 2000.

Oppenheim AN. Questionnaire design, interviewing and attitude measurement. London: Pinter Publishers Ltd; 1992.

Schwab B, Lusztig P. A Comparative analysis of the net present value and the benefit‐cost ratio as measures of the economic desirability of investments. Journal of Finance. 1969;24(3):507-516.

Wilcoxon F. Individual comparisons by ranking methods. Biometrics Bulletin. 1945;1(6):80-83.

Deshpande JV, Naik-Nimbalkar U, Dewan I. Nonparametric statistics: theory and methods. Singapore: World Scientific; 2017.

Jermakowicz EK, Gornik-Tomaszewski S. Implementing IFRS from the perspective of EU publicly traded companies. Journal of International Accounting, Auditing and Taxation. 2006;15(2):170-196.

Jones S, Higgins AD. Australia's switch to international financial reporting standards: A perspective from account preparers. Accounting & Finance. 2006;46(4):629-652.

Schiebel A. Is there a solid empirical foundation for the IASB’s draft IFRS for SMEs? SSRN 2008 Accessed: 30 July 2018 Available: The IFRS Foundation. IFRS for SMEs; 2013. Accessed: 30 July 2018 Available:

Hsu YL, Reid GC, Smith JA. Data for “Stated preferences: Accounting costs and benefits of UK firms 2013-2014”. University of Strathclyde 2021. Available: