The Dynamics of IFRS Enforcement: A Legal Endogeneity Perspective

This paper focuses on the endogenization of accounting regulation, and investigates, through an examination of the enforcement of International Financial Reporting Standards (IFRS) in the European Union over the period 2005-20222, the social dynamics through which public enforcement becomes institutionalized. A comparative analysis of public enforcement practice is interpreted mobilizing the modes of regulation framework of Cooper and Robson (2006), to provide an narrative of the legal and institutional processes surrounding the mandatory adoption of IFRS, in which prior social and cultural conditions of the reporting system shape concurrent economic outcomes. Our analysis provides descriptive evidence illustrating how institutional interdependencies counteract accounting harmonization in the EU.