Challenges and Solutions in Transitioning Financial Economics to International Standards
Abstract
General Background: The transition to international financial standards is a crucial process for enhancing financial transparency, comparability, and economic integration in the global market. Adopting internationally recognized financial reporting and economic management frameworks ensures uniformity, reliability, and trust in financial data across borders. Specific Background: Many economies face significant challenges in aligning their financial systems with global standards, such as the International Financial Reporting Standards (IFRS) and Basel regulations. These challenges include regulatory inconsistencies, institutional limitations, lack of expertise, and resistance to change. While some countries have successfully adapted to international financial standards, others struggle due to economic and structural constraints. Knowledge Gap: Despite extensive research on financial standardization, limited studies explore the practical challenges and systematic solutions for transitioning to international financial standards, particularly in emerging economies. Aims: This study aims to analyze the key obstacles in the transition to international financial standards, identify the underlying reasons behind these challenges, and propose effective strategies for overcoming them. Results: The findings indicate that insufficient regulatory frameworks, inadequate technical expertise, and the complexity of compliance requirements hinder the adoption of international financial standards. Strengthening institutional capacity, enhancing professional training, and implementing phased adoption strategies can significantly facilitate a smoother transition. Novelty: This research provides a comprehensive analysis of financial standardization challenges, integrating regulatory, institutional, and technical perspectives to offer a holistic understanding of the transition process. Implications: The study underscores the importance of policy alignment, capacity-building initiatives, and regulatory reforms in enabling successful financial standardization. These insights offer valuable guidance for policymakers, financial institutions, and regulatory bodies in formulating effective strategies for international financial integration
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