the present, most of the countries are moving towards converging local
accounting standards with the IFRS issued by the IASB. According to the survey
by Deloitte Touche Tohmatsu (2010), more than 100 countries around the world
had adopted the IFRS for their domestic companies. According to Lazar, Tay and
Othman (2006), in Malaysia, the action taken by MASB to adopt IFRS is a
reflection of Malaysia’s commitment to follow with the global accounting
standards and converge it into a one common set of accounting standards in this
age of cross-border trading for the whole worldwide.

 This convergence with IFRS will face some
challenges and difficulties to the Malaysian companies and capital market on
the level playing field with other universal economies and markets. Besides
that, the selection of the MFRS framework is an essential accomplishment for
the capital market as entities will be able to state their finance statement
are in fully compliance with IFRS as it is a fully compliant system and
comparable to IFRS. According to Tan, Lazar and Othman (2007) stated that the move
to IFRS represents one of the biggest challenges to Malaysia reporting entities
due to the adoption of IFRS mean adopting a new modern set of accounting
standards (Cope and Clark, 2003). Besides that, the preparer of the accounts
will be the most influenced as appropriation to IFRS will significantly alter
the way in preparing the financial statements (Ravlic, 2005). However, Joshi et
al. (2008) stated that there are still a few studies that have inspected the
judgement of proficient accountants in interpreting and applying accounting

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Another challenge for full adoption
of IFRS in Malaysia is that beneath MFRS 1, at whatever the cost of complying
with MFRS exceeds the advantages to the users of financial statements and also
if retrospective application would mean that judgement by management of a known
transaction is required but for the IASB would give exclusions and subsequently
this would make unlevel playing field among non-private entities in Malaysia
that are needed to apply MFRS framework as the basis for full-adoption.
According to (Barthe, et al., 2007; Chen et al., 2010; Horton et al., 2010)
mentioned that if the Malaysian directors are unconscious about the new
implications of IFRS in the form of MFRS, it will causes in a mismatch of
expected understanding and output of the financial reports. This will results
that the directors being responsible for any data asymmetry, in the shape of
non MFRS compliance money related reports and the Securities Commission of
Malaysia will take place to fine or imprisonment the directors forced by the


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