International Convergence of Accounting Standards: Issues and Challenges

Unarguably, globalization has become a key driver of the increasing integration and synergy among countries, systems and standards. Consequently, the clamor for International convergence of accounting standards and the adoption of International Financial Reporting Standards (IFRS) is expected. The thrust of this conceptual paper therefore, is to present an overview of the issues around international convergence of accounting standards. Our findings based on the review of literature reveals that studies are at polarity regarding the implications of convergence. While some studies anticipate positive correlation between convergence and key economic indicators such as market liquidity and reporting standards, others indicate otherwise, providing evidence that convergence is not essentially a “linear” process, but involves certain fundamental issues, concerns and challenges. We conclude by assessing the possibilities of convergence to IFRS vis-à-vis the Nigerian environment.Keywords: Accounting, international financial reporting standards (IFRS), market liquidity, convergence, institutional setting