Impact of Accounting Standards on Financial Decision-Making Investigate How Different Accounting Standards (E.G., IFRS Vs. GAAP) Influence Corporate Financial Decisions and Investor Behaviour, In Case of Pakistan

Abstract

This research investigates the impact of accounting standards, specifically the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP), on corporate financial decision-making and investor behavior in Pakistan. As globalization heightens the demand for transparency and comparability in financial reporting, the transition from local GAAP to IFRS presents both opportunities and challenges for Pakistani firms. The study employs a mixed-methods approach, utilizing quantitative analysis of financial performance indicators (ROE, ROA, EPS) and qualitative surveys to assess investor confidence. Findings reveal that IFRS adoption significantly enhances financial performance metrics and boosts investor trust, indicating a positive correlation between standardized financial reporting and investment attractiveness. However, challenges such as the complexity of IFRS and the need for comprehensive training for accounting professionals remain. This research contributes to the understanding of how accounting standards influence financial practices in emerging markets, offering insights for policymakers and corporate leaders to foster a more robust financial reporting environment in Pakistan.