In this paper, we empirically examine the International Financial Reporting Standards (IFRS) adoption decision of 61 countries in an attempt to determine why some countries have adopted IFRS while others, at least to this point in time, have chosen not to adopt. In particular, we examine the influence of cultural diversity and country size on the adoption decision. Our results indicate that the IFRS adoption decision is significantly related to the size of the country, while we are unable to document any cultural influences on the decision. Our chief result is that larger countries are less likely to adopt International Financial Reporting Standards than small countries. This result is consistent with the notion that larger countries have a well-established set of financial accounting and reporting standards already in place, and therefore would be reluctant to incur the costs of changing to an international set of standards
