Abstract:
Over the past few decades, the world has witnessed several devastating financial scandals that consequently lead to heightened scrutiny and ushered in several changes to the accounting function. In addition to that, technological advancements have brought significant changes to accounting resulting in the call for accounting to remain flexible and adaptable to the changes in the business landscape. Therefore, accounting standards which are designed as a means of improving transparency of financial transactions are expected to keep up with the rapid pace of the competitive business environment. It is important to understand how accounting standards develop as properly devised accounting standards can possibly reduce the room for accounting fraud and increase investors’ confidence level. Hence, the aims of this paper are: (1) to identify what are the internal and external factors that influence accounting standards development; and (2) to examine the historical events or activities that lead to the accounting standards development. The unit of analysis of this study is based on a single-country approach which is Malaysia. The paper proposes to utilise qualitative research methods such as interviews, observation, and reviews of other secondary or archival data will be utilised. Additionally, an event-sequencing method is proposed for classifying events or activities that gave rise to the development of accounting standards in Malaysia. The research outcomes are anticipated to provide evidence and understanding of the development of accounting standards in Malaysia by highlighting the internal and external factors and the historical events or activities that influence and lead to the development. The findings of the study may provide a useful reference for the interested parties in determining the direction of accounting standards such as formulating Islamic accounting standards for Malaysia.