Accession to the European Union and the Process of Accounting and Auditing Reform

Day, Judith; Taylor, Peter

doi:10.1080/09638180500379194

Cited by 6 publications

(3 citation statements)

References 26 publications

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“…See also Pellens and Sellhorn (2006). 27 Day and Taylor (2005) discuss the role of accounting and auditing in the process of accession of new Member States to the EU.…”

Section: Discussionmentioning

confidence: 99%

Implications of the ‘IAS Regulation’ for Research into the International Differences in Accounting Systems

Sellhorn

Gornik–Tomaszewski

2006

Accounting in Europe

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Meek and Thomas (2004) call for research on the continued relevance of ‘rediscovered’ dichotomous accounting classifications. We provide such evidence by examining how developments surrounding the ‘IAS Regulation’ (1606/2002) influenced international differences in accounting systems in the European Union. Since a sufficient time series of actual post-2005 International Financial Reporting Standards (IFRS) reporting practice is not yet observable, we propose an initial re-classification of accounting systems based on evidence available to date, that is, the degree of implementation of the IAS Regulation in the Member States. Consistent with Nobes (1998), we find that the degree of public accountability to outside investors (the ‘public/private’ criterion) is becoming the primary differentiator for accounting systems in Europe, surpassing country-level variables such as legal system and culture. The distinction between consolidated and individual financial statements is the second emerging differentiator. While consolidated accounting is becoming more uniform across countries, cross-country cultural differences are most likely to persist in individual accounting. Based on our analysis we highlight two important areas of future research beyond the consolidated financial statements of listed firms (e.g. Nobes, 2005; Schipper, 2005). First, at the country level, the interaction of IFRS and individual financial statements will need to be reassessed. In addition, research could help introduce a degree of differentiation into financial reporting regulation for unlisted firms, because these firms are not a homogeneous group. Also, the convergence of national GAAP systems with IFRS will benefit from fresh research insights. Second, at the firm level, future research could analyze the extent to which the determinants and consequences of IFRS adoption, an area well researched for publicly traded firms (e.g. Cuijpers and Buijink, 2005), generalize to unlisted firms. Such research will help detect emerging patterns of accounting systems within an international context. It will generate insights into the disconnect of consolidated accounts from national influences, the degree of uniformity of consolidated accounts among international firms, the continued relevance of traditional classifications of international accounting systems for individual accounts and accounts of unlisted companies, and the convergence of national standards with IFRS.

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“…See also Pellens and Sellhorn (2006). 27 Day and Taylor (2005) discuss the role of accounting and auditing in the process of accession of new Member States to the EU.…”

Section: Discussionmentioning

confidence: 99%

Implications of the ‘IAS Regulation’ for Research into the International Differences in Accounting Systems

Sellhorn

Gornik–Tomaszewski

2006

Accounting in Europe

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“…Apart from Denmark, Sweden and Malta, all had incorporated the audit exemption option in their national accounting requirements, with the Netherlands, Germany and the UK using the EU maxima and the remainder used country‐specific size criteria. However, the degree of variation shown in the table must be interpreted in the context that some countries were formerly in the Eastern bloc, but are now transition or emerging market economies (Day & Taylor, 2005). During the past few years, the audit exemption thresholds in some countries in Europe have been increased (sometimes from very low levels) or set for the first time (FEE, 2009).…”

Section: Audit Exemption In the Eumentioning

confidence: 99%

Audit Exemption and the Demand for Voluntary Audit: A Comparative Study of the UK and Denmark

Collis

2010

Int J Auditing

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This study investigates the sufficiency of turnover as a surrogate for demand for voluntary audit and compares the determinants in the UK and Denmark. Empirical data for the study were drawn from government surveys of the directors of small private companies in both countries, which were based on same research instrument. Bivariate tests support the hypothesized effects of turnover and a range of firm-specific factors suggested by economic rationality and agency theory. The main contribution of the study is the finding that turnover alone is not a sufficient surrogate for the costs and benefits of audit. The main predictors are turnover and a slightly different combination of management and agency factors in each country. The study provides a model that can be tested in other jurisdictions and its findings should be of interest to the accountancy profession and national regulators planning to introduce or revise audit exemption for small companies. Key wordsAudit exemption, Denmark, class B companies, small private companies, UK, voluntary audit Correspondence to: Dr Jill Collis, Reader in Accounting, Brunel Business School, Brunel University, Uxbridge UB8 3PH, UK. Email: jill.collis@brunel.ac.uk AcknowledgementsThe author is grateful to the anonymous reviewers for their guidance and to Professor Michael Bradbury (UNITEC Institute of Technology, Auckland, NZ) and Professor Len Skerratt (Brunel University, Uxbridge, UK) for helpful comments on the first draft of this paper. Thanks are also due to discussants at the AAA International Accounting Section Midyear Conference, Charleston and the EAA Annual Congress, Lisbon. Author profileJill has conducted research for the Institute of Chartered Accountants in England and Wales, the Association of Chartered Certified Accountants, the Professional Oversight Board, the Department of Trade and Industry and the Department for Business, Enterprise and Regulatory Reform. Her work in the UK has contributed to regulatory impact assessments in Denmark, Finland, Norway and Sweden. A main contribution of the study is the finding that turnover alone is not a sufficient surrogate for the costs and benefits of audit. A logistic regression model identifies the main predictors as turnover (as a proxy for wealth at risk), combined with a slightly different combination of management and agency factors in each country. In both countries, management factors are that the cost of audit is not considered a substantial expense and it improves the quality of the financial information. In Denmark, an additional benefit is the check on accounting records and systems, which suggests that risk reduction is more important there. As far as the agency factors are concerned, meeting shareholders' needs for assurance is a factor in Denmark, but in the UK it was specifically associated with companies that are not wholly family-owned 3 and, to a lesser extent, with companies that have external shareholders. This implies a lower level of trust in the UK. In Denmark, the benefit of audit in support...

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“…Some studies have identified the problems of changing from one accounting system to another, and they suggest that this process can take several years to adjust (Al‐Htaybat ; Bailey and Alexander ; Day and Taylor ; Jaruga ; Jaruga et al. ; King et al.…”

Section: Compliance With International Standardsmentioning

confidence: 99%

Compliance Over Time by Australian Firms with IFRS Disclosure Requirements

Wang

2018

Australian Accounting Review

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Prior literature indicates that compliance with International Financial Reporting Standards (IFRS) is not complete in many countries. This study examines practice under the Australian version of IFRS by measuring compliance with the disclosure requirements of eight standards. The study focuses on data drawn from the consolidated financial statements of a sample of the top 200 Australian listed companies. To enable a time-series analysis of compliance over time, this study examines three reporting years: 2006, 2010 and 2014. This research identifies material non-compliance among Australian companies, finding that some disclosure items appear to be neglected by companies, such as some of the requirements of AASB 137 Provisions. This non-compliance raises questions about accounting and audit quality in Australia. It may suggest poor regulatory oversight.

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Accession to the European Union and the Process of Accounting and Auditing Reform

Cited by 6 publications

References 26 publications

Implications of the ‘IAS Regulation’ for Research into the International Differences in Accounting Systems

Implications of the ‘IAS Regulation’ for Research into the International Differences in Accounting Systems

Audit Exemption and the Demand for Voluntary Audit: A Comparative Study of the UK and Denmark

Compliance Over Time by Australian Firms with IFRS Disclosure Requirements

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