The Impact of Globalization on Harmonization of International Accounting Standards: IFRS Adoption Study in Indonesia

Abstract

This study aims to analyze the impact of globalization on the harmonization of international accounting standards, focusing on the adoption process of International Financial Reporting Standards (IFRS) in Indonesia. Globalization has driven the need for a universally acceptable financial reporting system, prompting Indonesia through DSAK-IAI to converge PSAK to IFRS since 2008. This research uses a descriptive-qualitative approach with literature studies and secondary data reviewed thematically. The results show that although IFRS adoption improves transparency, comparability and quality of financial statements, its implementation in Indonesia still faces technical, cultural and regulatory challenges, especially in the SME sector. The application of the fair value principle, the need for professional judgment, and limited resources are the main obstacles. Nevertheless, IFRS convergence is considered important to improve the competitiveness of the national economy in the midst of globalization. This study recommends strengthening human resource capacity, harmonizing domestic regulations, and continuous assistance by regulators as strategic steps forward.