The adoption of International Financial Reporting Standards in Developing Countries: Another Crisis of legitimacy Case study of Algeria
The International Financial Reporting Standards (IFRS) become a globalized set of accounting standards throughout the world. More than 130 countries have adopted accounting strategy reform toward IFRS, they are considered as a step to gain legitimacy. This study examines and clarifies the legitimacy of accounting reform in developing countries by using the perspective of the new institutional theory and the Weberian approach of legitimacy. We conduct a case study of Algeria using a variety of tools mainly an interview, observation, and analysis of archival data. Finally, we find that IFRS adoption in Algeria is significantly related to social pressures of isomorphism changes, which contradicts the current mainstream belief that adoption is highly associated with its corresponding economic benefits. In addition, we find that achieving isomorphism in the pursuit of the legitimacy of all kinds (coercive, normative, Mimetic) represent a trend that contradicts the real concept of legitimism that bases on the motivation of acceptance and recognition.
Keywords - International Financial Reporting Standards (IFRS), New Institutional Theory, Developing Countries, Accounting Reform in Algeria, Relevant Parties.