Institutional isomorphism and the adoption of lASs in a developing country: another crisis of external dependence

This paper provides a critical evaluation of the recent decision of the Bangladeshi accounting profession to adopt all applicable International Accounting Standards. The paper argues that institutional legitimisation is a key factor that drives the adoption process. This argument is based on evidence of immense pressure that major international donor/lending institutions put on the Bangladeshi government and professional accounting bodies to adopt lASs not only to provide credibility to foreign investors but also ensure that accountability arrangements with lending/donor agencies are tight enough. Clearly, the government and other institutions in Bangladesh have very little option (if any at all) because of the country's high dependence on aid. We argue that a wholesale adoption of lASs constitutes a quick-fix that may not necessarily be in the long-term interest of Bangladesh and its accounting institutions.