ISSUES AND CHALLENGES IN FULL ADOPTION OF IFRS

IN MALAYSIA
Lack of technical expertise
Working group mostly participate on a voluntary basis.
Low response from the Malaysian public on exposure drafts
and sometimes non-existent.
Lack of adequate research especially issues of developing
Islamic accounting standard.
Research evidence supported by empirical studies is lacking to
guide MASB deliberations.
Increasing resistance
Nationalistic sentiments due to different culture, legal system
Different emphasis on user groups

 accounting treatment of many items in different countries

Example: the companies in the EU are allowed to report assets on the
balance sheet at market values, whereas US companies are only
allowed to report assets like property, plant, and equipment in amounts
upto thevalue ofthe historicalcost.
societal factors that influence accounting and consequently lead to
diversity between accounting systems.
These societal factors are related to the different ways in which the
societies and countries organize themselves.
Example: geographically close countries, such as the US and Mexico,
may have fundamentally different accounting principles. The reason for
this is that those countries and their accounting systems may have
been exposed to different external and internal influences, such as the
culture and the religion(s) of the country, egulatory/governmental or
political, economic, legal, tax, educational, and financial systems, as
well as trade, current and historical events and relationships to other
countries, forms of investment.

 legal system common law and the code (codified) law have been defined as
the two major types of legal systems.
With regard to accounting, in code law countries, the accounting rules are
given in the accounting law that is passed by the government and as a result,
the accounting profession does not have much influence on the developments
of the accounting standards.
In common law countries, the accounting rules are established by nongovernmental organizations and the accounting profession. It is claimed that
because of the difference in the source behind the establishment of
accounting rules and standards, these tend to be more detailed in common
law countries and in code law countries
Example:

Taxation.
The financial statements are used as the basis for taxation in many countries,
especially in code law countries. In common law countries, the financial
statements are adjusted when they are sent to the government for the
purpose of taxation and respectively when they are sent to the stakeholders.
Example:

 providers of financing.
There are countries in which the members of general population are the shareholders
and thus the providers of financing or the owners. In these countries, the orientation
of the financial statements is towards the income statements, so that the
shareholders can have proper insight into profit of a company.
However, there are countries where banks, powerful and influential families, as well
as the authorities and the government are the providers of financing. Since, for
instance, banks have more interest in solvency and liquidity and less in profit, the
orientation of the financial statements tends to be towards the balance sheet
Examples: The countries using the Anglo-Saxon/American model have also been
described as those where the common law is applied, where the public is the
main provider of financing of the companies, and where the financial
statements are adjusted when they are sent to the government for the purpose
of taxation and respectively when they are sent to the stakeholders.
The countries that belong to the continental-European group apply the codified
law, and here, the companies financial statements are the basis for taxation
and the providers of financing are banks, families, and the state