The study contributes to building an understanding of the impact of political forces on the information environment of listed firms in a developing economy. Specifically, it investigates the tensions between politico‐institutional factors and accounting regulation on the prolonged and incomplete implementation of theInternationalFinancialReportingStandards (IFRS) inBangladesh from 1998 to 2010. Two phases of interviews were conducted in 2010–2011 andIFRS‐related enforcement documents from 1998 to 2010 were evaluated. The study contributes thatIFRSsare being diffused to developing countries likeBangladesh, but they invariably interact with local institutions (political institutions in this case), with variable outcomes (i.e. negative outcomes ofIFRSimplementation). Coercive, normative and mimetic isomorphisms are low inBangladesh. Notably, political forces have been undermining mimetic isomorphism because of the high level of government intervention and the high level of political lobbying. Political institutional pressures stand in the way of mimetic isomorphism and constitute negative forces that add further tension to accounting regulation (e.g. the implementation ofIFRS) inBangladesh. Regarding the low level of normative isomorphism, there is evidence of a ‘blame culture’, with state institutions and professional accountancy institutions in the country blaming each other for the poor progress inIFRSimplementation. Although the study focuses onBangladesh, its results have implications for international policy makers (theInternationalAccountingStandardsBoard, theInternationalMonetaryFund and theWorldBank), as well as the governments and regulators of other developing economies facing similar challenges in implementingIFRS.
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