This article aims to study the effect of the adoption of the International Financial Reporting Standards (IFRS) on firms. For this purpose, IFRS' impact on firms' management and financial statements has been analyzed.

International accounting, a field of academic interests, has significantly grown in importance in the last couple of years. As such, it triggered an animated debate among economists for putting forward different issues arising from the still vague boundaries of this scientific and practical area. The latter becomes important, especially in the emphasized conditions of international integration of firms, which in turn, provides them with more opportunities to approach new markets and, therefore, to increase their sales, and of course, obtain financing from the multinational financial markets. The last is accompanied by many obstacles. From the view of accounting, outrunning those impediments calls for harmonization of international accounting (Combarros, 2000). Rudhede and Wahlberg (2003) attribute the lack of accounting synchronization to the investors' and companies' difficulties in understanding the variety of accounting principles among countries.

Hence, a supranational entity is needs to be in place for preparing, issuing and interpreting, internationally accepted rules for the accounting practice. Such a body is the International Financial Reporting Standards (IFRS) Board, which is "committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements" (IFRSB, 2002, p.1). IFRS, creates a common language for defining, interpreting and publication of financial statements in the whole world (Blanc, 2003). Furthermore, their aim is "to provide a standardized and coherent sight of the companies to the shareholders and investors."

Adoption of IFRS should enhance firms' performance in many ways. Houston and Reinstein (2001) point out that international accounting harmonization will trim down the costs of doing business, especially across national borders, that will contribute towards greater efficiency of the market regulations and will reduce the costs for conducting financial statements analysis and investments in the international context.

Accounting World Magazine, International Financial Reporting Standards, IFRS, Financial Statements, International Accounting, Multinational Financial Markets, Global Accounting Standards, Decision Making Processes, Financial Reporting, Intangible Assets, Market Regulations, Accounting Principles.