Investigating the determinants of firms’ perceptions toward the implementation of CIFRS in Cambodia

Abstract

The path analysis conducted using Structural Equation Modeling (SEM) provided insights into factors that influenced firms’ perceptions of adopting the Cambodian International Financial Reporting Standards (CIFRS). Among the five variables examined, only stakeholder knowledge and attitude (SKA) and cost of CIFRS adoption (CAC) showed statistically significant impacts. SKA (estimate = 0.377, p = 0.002) positively affected perceptions, emphasizing the importance of stakeholder awareness and professional development. CAC (estimate = 0.780, p < 0.001) was the strongest predictor, suggesting that firms investing in training and implementation were more likely to hold favorable views toward CIFRS adoption. Other variables, internal control systems (ICS), financial reporting components (FRC), and inconsistency with legal requirements (ILR), did not show significant influence, although ILR showed a marginally negative effect. Overall, the findings indicated that human capital and financial readiness were more critical than structural or regulatory factors. Regulatory and institutional support remained essential for effective CIFRS adoption across Cambodian firms.