BENEFITS AND FACTORS AFFECT THE ADOPTION OF

INTERNATIONAL ACCOUNTING STANDARDS AND

REPORTING SYSTEM IN POLAND
 BACKGROUND AND HISTORY OF ADOPTION IN
POLAND.
 International Accounting Standards (IAS) were the first international accounting standards that were issued by
the International Accounting Standards Committee (IASC), formed in 1973.
 The goal then, as it remains today, was to make it easier to compare businesses around the world, increase
transparency and trust in financial reporting, and foster global trade and investment.

 Globally comparable accounting standards promote transparency, accountability, and efficiency in financial
markets around the world.

 This enables investors and other market participants to make informed economic decisions about investment
opportunities and risks and improves capital allocation.

 Universal standards also significantly reduce reporting and regulatory costs, especially for companies with
international operations and subsidiaries in multiple countries.
 BENEFITS OF IFRS ADOPTION IN POLAND

The Benefits of IFRS adoption in Poland are;

The first benefits is that IFRS promise more accurate, timely and comprehensive financial statement
information that is relevant to the national standards.

And the information provided by financial statements prepared under IFRS tends to be more
understandable for investors as they can understand the financial statement without the necessity of
other sources which makes investors more informed

This also helps new or small investors by making the reporting standards simpler and better quality as
it puts small and new investors in the same position with other professional investors as it was
impossible under the previous reporting standards.
 BENEFITS OF IFRS ADOPTION IN POLAND CONT’D

This also helps to reduce the risk for new or small investors while trading as
professional investors can not take advantage due to the simple to understand
nature of financial statements.

Due to harmonization and standardization of reporting standards under IFRS, the

investors do not need to pay for processing and adjusting the financial statements
to be able to understand them, thus eliminating the fees of analysts.

Therefore, IFRS reduces the cost for investors.

 CHALLENGES OF IFRS ADOPTION IN POLAND

The challenges of IFRS adoption in Poland are;

It would increase the cost of implementation for small businesses: This process means that it would be the sole
proprietors, single-person LLCs, and partnerships which would bear the brunt of this accounting change.

It would lead to concerns with standards manipulation: The IFRS can lead to fraudulent activities, like changing
the method of inventory valuation.

It would require global consistency in auditing and enforcement: Differences in political and economic systems
works to reduce the amount of comparability which is available. The Poland has an effective enforcement policy on
its accounting rules.

 It would increase the amount of work placed on accountants: The implementation of a new system of global
accounting standards would require a complete revision of the domestic accounting processes and strategies. 
 Factors Affecting the IFRS adoption in Poland
The Factors Affecting the IFRS adoption in Poland are;

 Economic changes and transformation of centrally planned economy into market economy

 Beginning of the mass privatization of State-owned companies.

 Beginning of the harmonization process with the provisions of European law.

 Establishment of the National Chamber of Auditors, which issued the Polish Auditing

Standards.