Adoption of IFRS by developing countries: The problem of financial dependence and the politics of neo-imperialism

Subject. This article analyzes the practices of adoption of International Financial Reporting Standards (IFRS) by developing countries. Objectives. The article aims to study the key reasons for the transition of developing countries to IFRS. Methods. The research is speculative. For the study, I used the dialectical method of scientific knowledge, the method of collecting theoretical information, as well as analysis and synthesis, comparison, and generalization. Results. Based on the analysis of the practices of ten developing countries that adopted IFRS, the article finds that the fundamental reason for the transition was the political motives of States in terms of attracting foreign aid, including cheap loans from donor institutions (the World Bank, the International Monetary Fund, etc.) or joining regional State associations (the European Union). It is determined that the United States and the European Union exerted pressure on developing countries to adopt IFRS as a condition for receiving foreign aid. Such economic and political coercion is the extension of the power of the United States and the European Union to other countries within the framework of the policy of neo-imperialism. Conclusions and Relevance. Over the past twenty years, the International Accounting Standards Board has been actively promoting its own standards, pointing out that they are of high quality and flexible, that they are supported by various institutions (the World Bank, the International Monetary Fund, etc.) and that IFRS bring net benefits to capital markets. However, the results of scientific research over the past ten years help directly state that today there is no convincing evidence of the indicated advantages. Many researchers have a clear position that developing countries adopted IFRS as a result of political and economic coercion from the European Union and the United States. The results of the work can be useful to developers of accounting standards, officials whose work is related to the regulation of accounting, as well as researchers and other interested parties.