1. EXTRA-FINANCIAL ANALYSIS OF IFRS ADOPTION AND APPLICATION IN DEVELOPING COUNTRIES: THE CASE OF INDONESIA. 1 Bienmali Kombate Master student in Management 1 Faculty of Economy and Business, Sebelas Maret University of Surakarta 1 Email: bienmalikombate@student.uns.ac.idbienmalikombate@student.uns.ac.id And 2 Bandi Accounting and Finance Lecturer 2 Faculty of Economy and Business, Sebelas Maret University of Surakarta 2 Email: bandi.ssm@gmail.combandi.ssm@gmail.com

2. Content Introduction and Background Research Method Research Findings Conclusion and Recommendation

3. Introduction Background IFRS is an accounting framework which has world wide acceptance, 147 countries fully adopted IFRS according to the update information by IASB in early May 2016. Legally known by Indonesian Government in early 2012 Eliminating multiple reports and helping understand foreign investors who do not have knowledge of Indonesia accounting standards Provide transparency, relevance, and comparable information Improving foreign investments and increasing industrial growth

4.  Problem statement Hans Hoogervorst, chairman of IASB in his speech at the International seminar on “IFRS Dynamics 2013 and Beyond the Impact to Indonesia encouraged all companies in Indonesia to follow a gradual convergence process to fully embrace IFRSs. Indonesian companies, public and private ones are facing some difficulties in IFRS implementation in their annual financial reports. The lack of research and limited research has been undertaken in understanding the pathway of the transition towards the use of financial common language IAS/IFRS in this country.

5.  The Purpose of the Research To analyze the problems regarding the adoption and application of IAS/IFRS in the context of Indonesia, an emerging country by focusing on Extra-Financial Factors Analysis; To present some policy recommendations for adoption and implementation of IAS/IFRS to ensure good financial report in Indonesia.

6.  The Advantages of the Research The results will allow DSAK-IAI local or foreign investors, accounting body, and managers to know the impact of extra- financial factors on IAS/IFRS application in Indonesia context. The research will be as reference material for those who will carry out more research on this issue.

7. Research Method Exploratory research design and Quantitative research method was applied in The study. The data was collected from both primary and secondary sources. Primary data was collected through survey approach by a series of questionnaires and the technique of Likert-type scales was used to rate respondents’ feeling.

8. Research Method  Place, Population and Sample: Place: Java Island, Indonesia Population: Accounting academics (Lecturers, PhD and Master students) in Indonesian universities and practitioners. Sample: A Sample of hundred (100) respondents. Sampling Method: Convenience sampling

9. Research Findings Cronbach ‟ s alpha was 0.810 greater than 0.6 regarded as a satisfactory level Pallant, (2007) which is acceptable in social science research Field The summary of Item statistics means for all survey Item showed that the overall means (μ=3.657) with a minimum of 2.927 and a maximum of 3.990. These results confirmed that the extra-financial factors including legal system, taxation system, economic and political ties, culture structure, and accounting education and infrastructures impact Indonesia companies in their IAS/IFRS adoption and application.

10. . Legal System Factor CodeSDDNASAMean Std. Deviation NONO %NONO %NONO %NONO %NONO % Q11144.21111.5737677.33.840.654 Q21124253233.33536.544.23.180.894 Q333.12829.23839.62728.1002.930.837 Q41133.11616.76668.81010.43.840.686 Q50077.31717.76466.788.33.760.707 Taxation System Factor Code SDDNASA Mea n Std. Deviation NONO %NONO %NONO %NONO %NONO % Q6111212.53132.34647.966.33.460.832 Q7001212.54142.73536.588.33.410.815 Q81144.21212.56365.61616.73.930.743

11. . Economic and Political ties Code SDDNASA Mean Std. Deviation NONO % NO NO %NONO %NONO %NONO % Q90044.21919.85254.22121.93.940.765 Q1033.11919.82627.13940.699.43.331.002 Q1122.11515.624254647.999.43.470.94 Q121188.32627.15456.377.33.60.788 Q130099.43132.34243.81414.63.640.848 Culture Structure Code SDDNASA Mean Std. Deviation NONO % NO NO %NONO %NONO %NONO % Q140014 14. 6 3132.34243.899.43.480.858 Q150077.323245557.31111.53.730.761 Q160077.323245456.31212.53.740.771 Q170022.125266163.588.33.780.619

12. . Accounting Education and Infrastructure Code SDDNASA Mean Std. Deviatio n NONO %NONO %NONO %NONO %NONO % Q18007.37.72020.85456.31515.63.80.79 Q190066.31818.85254.22030.83.90.801 Q201122.11313.56163.51919.83.990.718 Q211155.21818.85759.41515.63.830.79 Q220088.323243839.62728.13.880.921

13. Suggestion The study identified that the knowledge on IFRS is very poor among the respondents, 50% of the respondents have experience in IFRS less than two (2) years. Though the DSAK-IAI, government, accounting body, and academics are the pillars of the transition process. Thus, it is suggested to ensure adequate training and knowledge on IFRS and its implementation benefits. Establishment of Financial Monitoring Board: The government takes act to reinforce the independent oversight body named IAI to support the responsibility of setting accounting and auditing standards, monitoring compliance with accounting standards, reviewing auditors’ practice and reviewing reporting practices and enforcing sanctions for violations

14. Role of government: The government should introduce an awareness program for improving the degree of compliance with IFRS requirements; Upgrading accounting curriculum: In order to ensure a minimum quality standard in teaching accounting and auditing courses in all Indonesian universities, an initiative is necessary for a sophisticated curriculum development and training-the- trainers activities.

15. Conclusion The adoption of IFRS by Indonesian companies will ensure a greater credibility and trust in the international capital market and gain the confidence of both domestics as well as international investors. There can be a number of challenges entering into the transition process, but since these standards are new and unfamiliar to Indonesia accounting local staff, several training must be done to ensure that these accountants are adept with handling these new standards. IAI, Indonesian Government, business owners, accounting staff, accounting institutions and academics may work together to bring all companies listed or unlisted to embrace and fulfill IFRS adoption.

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