Final answer:
The requirement for listed and unlisted companies to comply with IFRS depends on the jurisdiction's regulations. Listed companies typically must adhere to IFRS, while unlisted companies' requirements vary, sometimes using local GAAP instead, depending on the company's size and stakeholder interest in transparency and comparability.
Step-by-step explanation:
The question refers to whether both listed and unlisted companies are required to comply with the International Financial Reporting Standards (IFRS). The answer to this depends on the regulations of the specific jurisdiction in which the companies operate. In many parts of the world, particularly in the European Union and other jurisdictions that have adopted IFRS as their standard, listed companies are generally required to prepare their financial statements in accordance with IFRS. Unlisted companies may also be required to follow IFRS, especially if they are large or if there is a particular interest from stakeholders in the transparency and comparability that IFRS provides. However, for some small to medium-sized unlisted entities, local generally accepted accounting principles (GAAP) may be used instead if IFRS is not mandated by their country's regulations.
It's essential to note that the decision to use IFRS or a local GAAP is often influenced by factors such as the company's size, the nature of its operations, and its capital requirements. Global companies or those seeking to attract international investors often adopt IFRS voluntarily to align with global financial reporting standards, which enhance comparability with peers internationally.