FINANCIAL CAPACITY AND SOFTWARE ADOPTION IN IFRS CONVERGENCE: EVIDENCE FROM INDIAN FIRMS

Abstract

Purpose
This paper investigates how organizational net worth influences the awareness, adoption and implementation of International Financial Reporting Standards (IFRS) and Indian Accounting Standards (Ind AS). It examines the relationship between company size, reporting practices and accounting software choices, providing insights into the factors driving convergence with global standards.
Design/methodology/approach
A quantitative research design was applied using a structured questionnaire administered to 381 professionals across manufacturing, IT, services and chartered accountancy sectors. DEMATEL, weighted mean analysis, chi-square tests and Spearman correlation were employed to identify key determinants and causal relationships among variables such as net worth, IFRS awareness and the adoption of IAS-based software.
Findings
The analysis reveals that companies with higher net worth demonstrate greater awareness of IFRS and are more likely to use IAS-compliant accounting software. “Accounting Methods” and “Convenience” emerged as the most influential factors shaping reporting practices. While smaller firms continue to rely on Indian GAAP, financially stronger companies are transitioning to globally aligned systems.
Research limitations/implications
The study is based on expert perceptions from selected industries in India and may not fully represent all sectors or geographic regions. Further research using longitudinal or cross-country data would improve generalizability and clarify causal relationships.
Practical limplications
The findings highlight the need for targeted training, regulatory support and technology adoption strategies to help smaller firms transition to Ind AS and IFRS-based reporting. Policymakers and professional bodies can use these insights to design interventions that encourage convergence with international standards.
Originality/value
This research provides an integrated view of how net worth, reporting standards and accounting software intersect in shaping financial reporting practices in India. It advances understanding of the drivers of IFRS convergence and identifies actionable factors for stakeholders seeking improved transparency and comparability.