The Need to Provide Internationally Comparable Accounting Information and the Application of IFRS: Empirical Evidence from German Private Firms

Abstract Our study, which is based on a survey carried out among German private firms, aims to ascertain which characteristics determine private firms’ need for providing internationally comparable accounting information and whether or not those firms that perceive such a need actually apply IFRS voluntarily. The relevance of equity from foreign investors and inclusion within an international group are positively associated with this perceived need, whereas international operating activities and a firm’s size are not. Regarding the voluntary adoption of IFRS, both the perceived need and also the interaction between size and need are significant. Our results show that smaller firms, despite perceiving a need for providing their stakeholders with internationally comparable accounting information, often do not apply IFRS.