A new approach to the problem of harmonizing international accounting reports (original) (raw)
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IMPACT : International Journal of Research in Business Management, 2021
Fundamentally, the international effort to achieve a common set of accounting standards is not an easy task. It has started long ago to correct the differing and varying national accounting standards and principles in different parts of the world, however, the ultimate aim is to move towards harmonization. The process of harmonization seeks to bring all the different standards and reporting for better comparability, consistency, and reliability and to shorten the gap of these different streams of accounting rules, regulations, policies, practices, principles, and guidelines The objective of this current study is to review and understand the emerging issues, challenges, and benefits of adopting and achieving a common set of globally accepted accounting standards that are high quality, understandable, comparable, consistent, and reliable. However, the huge benefit of comparability and consistency can be made and that reliable and relevant accounting information is needed more than ever in the capital market to enhance investment opportunities and improve the investor’ s economic decision- making. There remain some strong national accounting standards, laws, and regulations that are simultaneously practiced, accepted, and working well in certain countries and jurisdictions. The existence of different accounting principles would serve as a threat to the harmonization and convergence process. Consistent with such gains, it is hoped that the accounting world over time would be controlled and guided by a single set of standards that are universally accepted, comparable and usable in different jurisdictions.
1993
and the United States of America established the International Accounting Standards Committee (IASC) in a bid to confront the problem of international accounting diversities. In addition to the efforts of the IASC, various other bodies such as the United Nations, the European Community, the Organisation for Economic Cooperation and Development, have at various times also attempted to address this problem. Against this background, the first main objective of this study, is to assess the extent to which the accounting measurement and associated disclosure practices of five leading countries, namely: France, Germany, Japan, the UK and the USA differ in spite of the major efforts made so far to reduce or eliminate diversities in the accounting practices of different countries. The second main objective of this study is to ascertain the extent to which the accounting measurement and associated disclosure practices of multi-listed and domestic listed companies from these five countries differ. This is interesting in view of the argument that globalisation and internationalisation of capital markets provide a justification for global accounting harmonisation. In order to accomplish the study objectives, the financial statements of 413 large listed companies from France, Germany, Japan, the UK and the USA for the 1990/91 financial year and 293 large listed companies for 1970171 financial year were surveyed to ascertain the extent to which there were significant diversities between the accounting measurement and associated disclosure practices of companies from the five countries before (1970171) and after (1990/91) the major efforts by the 1ASC and other organisations to minimise differences in accounting practices worldwide. Overall, it was found that on many of the issues treated, there are still significant differences between the five countries. A comparison of the practices of companies from the five countries as between 1970/71 and 1990/91 also observed significant differences on a substantial number of the practices surveyed. 1. 1970171 than in 1990/91. This is surprising in view of the major efforts that have been made to improve the levels of harmony in the financial reporting practices of companies internationally. ACKNOWLEDGEMENTS The successful completion of this study was made possible by the contributions of various persons to whom I feel highly indebted. First of all I give thanks to the Almighty God from whom all blessings flow. Next, I wish to express my gratitude to my supervisor Professor Sidney Gray for his guidance and support all through the period of the study. I also wish to put on record my appreciation to many other persons who helped in various ways to make the completion of this work a reality. Professor Gerhard Mueller of the University of Washington, Seattle for giving freely of his time to discuss various aspects of the study with me during my study visit to
Harmonization of Accounting Standards through Internationalization
International Business Research, 2009
The journey to have a common set of accounting standards started long before to give it a professional shape and essence. And accountants all over the world feel the necessity to shorten the gap among different streams of accounting practices through harmonization. Still, we have a couple of strong variants of accounting practices (say, for example, US GAAP, UK GAAP, IAS etc.) over the world existed and practiced simultaneously. These variants are working as threats towards harmonization of accounting practices. However, the profession has also witnessed some improvements in recent years in the process of global convergence putting some ray of hope. International and even local standard setting bodies have come up with projects of harmonization and in most of the cases became successful.
Financial Reporting Demands in a Globalised World: The Harmonisation of Accounting Rules
OECD accounting regimes have significantly changed over the last three decades. Financial reporting rules for (public) companies have become more similar, and the ways in which accounting rules are set and enforced have converged. This paper explores to which extent (financial) globalisation drives convergence of financial reporting systems. We analyse globalisation developments and changes in accounting regulation in six large OECD countries: Canada, France, Germany, Great Britain, Japan and the USA. We identify changes in the demand and supply patterns of accounting regulation, and we present empirical evidence for the concurrence of financial globalisation and accounting harmonisation. A newly developed financial globalisation index and changes in accounting regulation are jointly analysed. We find that the analysed countries have experienced distinct waves of globalisation since the beginning of the 1970s and that these waves coincide with a delayed accounting harmonisation. JEL classification: M 41, G 15, G 38
KNOWLEDGE International Journal, 2019
The subject of research in this work is the accounting of enterprises on a global scale. The subject of the article is to develop a global accounting framework for preparing and presenting the financial statements of business enterprises. The primary objective of the study is by analyzing the applicable accounting frameworks of IFRS, US and EU to derive the concept of financial reporting fundamentals. In the article is supported the thesis that the integration of different national accounting legislation and internationally applicable accounting frameworks is a theoretical and practical possible and feasible process at the center of which lies the deductive conceptual approach. The ultimate outcome of accounting integration will be reflected in the global adoption of the concept that financial reporting is a whole, comprehensive and complete process that aims to provide high quality information about the entity's business, the results achieved and the effectiveness of its operations, the changes in its cash flows and equity. The research approach is aimed at carrying out a structural analysis of the fundamental rules, norms and requirements of the conceptual frameworks of IFRS and the US Generally Accepted Accounting Principles as well as the EU Accounting Regulations. On this basis, on the one hand, the basic similarities and resemblances of the accounting frameworks in question are systematized and, on the other hand, their most significant contradictions are summarized. An attempt has been made to outline the factors, conditions and circumstances that have led to the establishment and adoption of different concepts in the accounting and presentation of financial statements of business enterprises. The article presents the role and importance of the processes of harmonization, convergence and adaptation of accounting rules as part of the evolutionary development of financial reporting. The author draws special attention to the fact that the integration of financial reporting should not be absolutized. Accounting globalization implies that, at global level, basic concepts, principles, rules and bases of accounting and presentation of aggregated accounting information are adopted in the financial statements of enterprises but at the same time hierarchically subject to specific rules and norms corresponding to the local , national and regional specificities. Although a global consensus has been reached on the purpose of financial reporting, at an individual enterprise level, accounting needs to meet the objectives, requirements and needs of both the owners of the capital and the external users of the summarized accounting information. In this regard, the European Union's experience with the enterprise categorization approach and, for each category, the applicable accounting basis and the minimum requirements for the content and structure of the financial statements can be successfully used internationally.
International harmonization of reporting required by stock markets
The International Journal of Accounting, 1996
Un/vers@ of Zaragozi3 The 1980s wltnessed a >lgmficant evpanslon of tlnanclal markets and. more specifically. ot stock markets at a NorId level Capital flops circulated with greater fluIdIt from one country to another hy way of the transactions which were executed both rn the markets for goods and m the fmancldl mnrkets ' This has meant that companies can now seek finance m IntematlonA markets and it IS of Interest tor them to be quoted on the stock markets of other countries. which requires that they produce financial rntorrnatlon for these markets The differences which exist m the economic-accountmg en\ lronment m which companies operate (legal structure, market development, national policy obJectl\es, cultural factors) result m dlfterent procedures when shares are ottered to the market, drtterent reporting requirements required by the stock markets These dltterences reduce the efficlency of stock markets wlth11-1 an mtematlonal environment Wlthrn the context ot these differences. we consider II necessq to hlghhght the Importdnce ot the dlierslt} which exists with respect to the reporting requirements that are demanded rn an InternatIonal environment by the drfterent stock markets trom those companies which wish to be quoted on them. In that some countnes require information on The lntcrnatmnrl
International harmonization and national particularities of accounting
Journal of Accounting Organizational Change, 2013
Purpose-The purpose of this paper is to examine the recent accounting regulations designed to facilitate international harmonization in Vietnam and to show how Vietnam developed an accounting system that harmonizes with international standards while preserving macroeconomic control. Design/methodology/approach-This paper is developed using the theoretical framework on globalisation. Findings-The recent development of accounting aims to implement Vietnam's commitment to harmonize its accounting system with the world. This process has faced some difficulties due to national particularities such as Vietnam's economic system and accounting tradition. This paper shows that the regulators have been careful in their approach to develop and find ways to combine or adapt when pushing for accounting development: a coexistence of vietnamese accounting standards and a uniform accounting system. This point differs from the Anglo-Saxon world, but is comparable to China. Research limitations/implications-The different approach to developing accounting regulation in Vietnam reflects the key role of the State in preserving governmental control while harmonizing with international standards. Practical implications-This paper studies the influence of globalization on accounting development in Vietnam. It suggests that developing accounting practices in a country in harmony with international standards faces obstacles previously evidenced in the literature, such as economic system and accounting tradition. The study also provides insight into problems encountered by regulators who are incorporating international accounting standards into national accounting regulations. These problems suggest that international accounting standard setters and accounting regulators may face issues similar to those in Vietnam. Originality/value-This paper contributes to the literature on international accounting harmonisation by illustrating the need for considering national particularities as factors that will affect the rate of harmonisation with international accounting standards.
Advancing the Harmonisation of International Accounting Standards: Exploring An Alternative Path
The International Journal of Accounting, 1997
The IASC has been actively pursuing the goal of international accounting harmonisation for two decades. Whilst there has been much productive output, little progress has been made in achieving global uniformity in accounting. In attempting to explain the lack of progress, this paper adopts the view that the cause of stagnation is the process used to mobilise harmonisation. The IASC has only recently acted upon the fact that there has not been enough examination of the processes and structure of the IASC. Yet analysis of the mobilisation process reveals a number of j7aws, among these, concerns about the institutional legitimacy of the IASC. The consequence of theseflaws is that uniform@ in reporting practices is unlikely unless alterations are mode to the mobilisation mechanism, in this instance the IASC. This paper proposes a restructuring of the IASC and the adoption of the convention method as a means to remedy the perceived flaws in the current process.