The Adoption of International Financial Reporting Standards (IFRS) and Basel III Requirements: A Justification For the Role of Audits? (Jurisdictional Analyses)


  • Marianne Ojo, Prof. Dr. Faculty of Commerce and Administration, Department of Economic and Decision Sciences, North-West University, South Africa


fair value accounting, Finance Theory, information asymmetries, risk, corporate governance, ownership structures, auditor, disclosure, principal, regulation, agent, moral hazard, China, IFRS, Japan, Brazil, South Africa


As well as consolidating on the existing literature on fair value accounting, by way of reference to jurisdictional analyses which include a focus on China, Japan, Brazil, and South Africa, this paper not only highlights why there is need for a re-think of the use of fair values as the primary basis for the implementation of IFRS, but also accentuates the links between systemic risk and information asymmetries – hence the justification for greater focus on information channels as well as disclosure and financial reporting requirements.


Audits, which serve as vital signalling mechanisms in capital markets, have limited roles in many emerging economies than is the case with industrial nations. In contributing to the extant literature on the topic, this paper also aims to address the vital and crucial question relating to whether certain emerging economies are justified in their reluctance to fully embrace audits – based on cost- benefit considerations, as well as other inadequacies relating to fair value measurements. Furthermore, it will be highlighted that whilst audits may appear to have more limited roles in certain jurisdictions, there appears to be greater willingness to embrace Basel III requirements – and in particular, the Basel III leverage ratios in jurisdictions such as China.


Ultimately the paper also aims to investigate whether there are any justifications or rationales for a jurisdiction's willingness and pace to adopt IFRS, Basel III requirements, in relation to the existing role assumed by audits in such jurisdictions.


Download data is not yet available.


Ball, R „International Financial Reporting Standards (IFRS): Pros and Cons for Investors“ <>

Gray J and Hamilton J, Implementing Financial Regulation : Theory and Practice (2006) John Wiley & Sons

IFRS, “Analysis of the G20 IFRS Profiles”

IFRS, “IFRS Application Around the World: Jurisdiction Profiles”

JP Morgan, 'Basel III Implementation: Is the Industry Running Out of Time?' _/1320504512062
Khan, U „Does Fair Value Accounting Contribute to Systemic Risks in the Banking Industry?“ <>

Lastra RM and Wood G, „The Crisis of 2007 – 09: Nature, Causes and Reactions“ Journal of International Economic Law 13(3) at pages 531 and 532

Laux C and Leuz C, „Did Fair Value Accounting Contribute to the Financial Crisis?“ ECGI Working Paper

Series in Finance, Working Paper No 266 October 2009 at page 3. <>

Moreno M, Policymaking from a macro prudential perspective BIS Working Paper No 336, January 2011

Ojo, M „The Role of the IASB and Auditing Standards in the Aftermath of the 2008/2009 Financial Crisis“ European Law Journal, Vol. 16, No. 5, September 2010, pp. 604–623 at page 612

Ojo M, „Audits, Audit Quality and Signalling Mechanisms: Concentrated Ownership Structures“ (2013) and Basel Committee for Banking Supervision, paragraph 6 page 31, Core Principles for Effective Banking Supervision September 2012

Rojas-Suarez L , „Rating Banks in Emerging Markets: What Credit Agencies Should Learn From Financial Indicators





How to Cite

Ojo, M. (2014). The Adoption of International Financial Reporting Standards (IFRS) and Basel III Requirements: A Justification For the Role of Audits? (Jurisdictional Analyses). Journal of Social Sciences (COES&Amp;RJ-JSS), 3(4), 537–548. Retrieved from