ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS IN MALAYSIA.

Are Malaysian companies ready to cope with the transition to FRS when it becomes mandatory from 1 January 2006? A study, through a mail questionnaire survey was conducted to examine the implementation issues and the impact the adoption had on the financial statements of public listed companies. To complement the findings of the questionnaires, interviews were conducted with representatives from the Big 4 audit firms, as well as the regulatory bodies and the standard setting body. The questionnaire findings revealed that the biggest drawback in the implementation process was the lack of briefing given to financial analysts and investors on the impact of FRS on the company's financial statements. Even though many seminars and workshops were organized by professional bodies, the business community appears to be slow in responding to the need to be knowledgeable in FRS and the importance of staff training. It was envisaged that the most difficult standard to apply will be FRS139, whose adoption has now been postponed indefinitely. The adoption of FRS 2 will affect the company's policies on bonus plan, remuneration and share options schemes. A survey of the interim reports of 30 top companies, together with the accompanying explanatory notes was conducted to examine the impact of the adoption has on the accounting policies. The findings revealed that the standard which has the highest impact was FRS101. The changes in the presentation and reclassification of items in the financial statements will impact the company's reported earnings. [ABSTRACT FROM AUTHOR]