Global Standardization of Accounting

Although seven years have passed since the Norwalk Agreement has been signed, the global accounting standards continue to represent a goal for IASB and FASB, being far from the stage of practical implementation. More than that, the financial crisis made things worse, as it contributes to the unfavourable conditions for the development of convergence process. But despite all these negative elements, FASB and IASB continue to collaborate in obtaining a single set from the two distinct accounting regulations, which can serve for practical accounting purposes. The globalization phenomena imply the existence of a unique set of financial reporting standards. Thus, accounting diversity is to be reduced at international level, so that it would be in accordance with companies’ interests. Therefore, one can state the importance of harmonizing both national and international accounting regulations.

2007

and issues emerging from implementation (e.g. interpretation and enforcement of the standards). The second chapter (Clark, Hebb and Wojcik), which assumes a reasonably strong knowledge of financial theory, examines the origins of the demand for accounting knowledge. The third (Stevenson) charts the history of the IASB over its first 5 years. The chapters that follow each focus on the experience of an individual country and consider various aspects of its relationship with IFRS. The countries selected include those from the 'Anglo-Saxon' tradition, major continental European countries, Japan, South Africa and the emerging economies of China, India and Malaysia. These chapters do not follow a standard format. Some are written by academics, others by regulators or ex-regulators. Most are intended to provide a survey of relevant events in the past and present, and consider likely future developments. Others (such as those on Germany and Japan) also incorporate the results of empirical research, which perhaps does not fit easily in a book of this type. Inevitably with a collection of papers, some chapters are written in an interesting and lively style, while one or two are more laborious. The emphasis is on the political rather than the technical aspects of standard setting. The chapters which focus on the old members of the G4+1 'working group' share a broad acceptance that financial reporting should primarily meet the needs of investors. They tend to focus more on the type of standards which are most likely to promote good quality financial reporting-a debate that continues. Street explains how FASB, having gained an international perspective in the early 1990s, was gradually positioning itself to become a global standard setter and that this forced the IASC to emulate FASB in many respects. In particular, it needed to gain additional resources in order to compete effectively in the battle for ideas. Alexander explains how the UK believed that, as a vehicle for harmonisation, the IASB approach was compatible with its own views on financial reporting. This contrasted with the other options, the EU (where the majority of members had traditionally different objectives for financial reporting) and US GAAP (which tended towards a detailed rule-based approach to regulation which would replace the judgement inherent in the British system). Gaa discusses Canada's efforts to find middle ground in the rules vs. principles debate, caught between the economic influence of its geographical neighbour and its historical and cultural ties to the UK. The chapter on Australia (Picker) will be particularly interesting to anyone who has studied the introduction of IFRS in Europe. It analyses the response in Australia to the shock announcement that it would adopt IFRS from 1 January 2005 for all listed and unlisted reporting entities, as well as the public sector (considered in more detail in a separate chapter)-a much wider population than that covered by the EU Regulation. She concludes that IASB's attempts to converge with FASB may result, after all, in the IASB becoming redundant and US GAAP becoming the global accounting standards. She further suggests that this would cause a return to differential financial reporting, since standards developed to meet the needs of commercial entities operating in global markets will not necessarily meet the needs of other entities. Contributions from a continental European perspective tell a common story of difficulty in moving from a government driven, tax dominated accounting to one based around the needs of capital markets. The chapter on France (Evraert and des Robert) is particularly sceptical about the value of the 'new set of Anglo-Saxon rules endorsed by the EU' (p. 130), questioning the extent to which shareholders will benefit from the new standards, and whether the benefits exceed the costs. It affirms that IFRS will have limited applicability in France because there is no chance of decoupling tax from accounting and because of its unsuitability for SMEs. Koga and Rimmel discuss the reasons why Japanese standard setters, although working towards convergence with IFRS, have chosen to retain local standards. Traditionally Japanese business structures have emphasised long-term relationships between companies (evidenced by cross-share ownerships) and bank lending. Greater access to information has been available to key investing groups, but full disclosure to wider groups has always been seen as an unnecessary cost. As overseas capital becomes more important, IFRS may become increasingly attractive. Both China (Zhang and Lu) and India (Narayanaswamy) have moved from centralised economies with heavy reliance on state banks to a stronger market orientation with policies of privatisation, the desire to attract foreign investment and consequent rise in importance of capital markets. Both countries have seen the advantages of converging their local standards with IFRS, but effective enforcement of standards remains an issue.

European Accounting Review, 2014

This study combines Dillard et al.'s [(2004). The making and remaking of organization context: Duality and the institutionalization process. Accounting, Auditing & Accountability Journal, 17(4), 506-542] institutional change model with institutional entrepreneurship theory. The aim is to enhance understanding of institutional change processes when a country adopts international accounting standards. For empirical support, we focus on the changes in social structures and accounting practices that arose in 2010 when Portugal replaced its national accounting system for unlisted companies, with a new system of accounting based on International Financial Reporting Standards. We reveal how an evolving socioeconomic and political context, and the embedding of central actors in multiple fields, facilitated entrepreneurial action by actors who took political opportunity, mobilised important allies, and accommodated the interests of major protagonists. We draw attention to the possibility of an earlier inversion of the cascading institutionalisation process than is envisaged by Dillard et al. (2004). At the organisational field level, we highlight how national professional accounting associations and business associations can shape criteria established at the political and economic level, thereby counteracting the institutionalisation process. At the organisational level, we focus on the accounting standard for small and medium-sized entities. We provide insights to why some accountants maintained structures of meaning associated with the previous accounting system.

2012

The study of the development of accounting standards, as a process of accounting change, involves understanding why and how accounting evolves through time and in consideration of its context. This paper aims to understand the phenomenon of global accounting change which is taking place through the development of a single set of accounting standards accepted for worldwide market regulation. In doing so, this paper considers the process of global accounting change as it has evolved over time and within a complex space occupied by a multitude of actors by focusing on a single, comprehensive case. Based on existing evidence and secondary data on the selected case, we use Greenwood and Hinings’ (1993) archetype theory to explain the process of global accounting change through the concepts of archetypes, coherence and tracks. The case reveals the process to follow a variable and irregular trajectory over time, ultimately representative of an unresolved excursion towards an alternative ar...

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.