Does Convergence of Accounting Standards Lead to the Convergence of Accounting Practices?

Peng, Songlan; Tondkar, Rasoul H.; Smith, Joyce van der Laan; Harless, David W.

doi:10.1016/j.intacc.2008.09.009

Cited by 72 publications

(82 citation statements)

References 26 publications

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“…Despite the major efforts made by the Chinese authorities to borrow its content from the IASB, it is still markedly different. Empirical research into the extent of harmonisation between the PRC GAAP and the IFRS principles based on Chinese companies' financial statements found remarkable differences, which were gradually reduced by the reforms of 1998 and 2001 (Chen et al, 1999, Lin & Wang 2001, Chen et al, 2002, Lin and Chen 2005, Peng et al, 2008, Foo et al, 2009A review of the process through which China came to meet the IFRS standards along with the other hyper-developing economies, or better, the BRICS (Brazil, Russia, India, China and South Africa), shows that China's journey and targets are similar to those of India, which continued using local GAAP as an accounting standard (Indian Accounting Standards-IndASs). Russia, Brazil and South Africa have instead slowly completed their formal adherence to IFRS standards (Note 9), therefore establishing their distance from China and India.…”

Section: Relevant Scholarshipmentioning

confidence: 99%

International Differences in IFRS Policy Choice and the Persistence of Accounting Classification: The Case of China

Rossetti¹,

Verona²

2017

IJBM

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This paper focuses on the application of IFRS standards in China. The research is mainly conducted on the basis of Kvaal and Nobes's studies (2010) regarding the different ways that various countries apply IFRS and Nobes's IFRS accounting classification system (2011). For companies that issued B shares, the use of IFRS in China lasted only until the 2006 ASBE (Accounting Standards for Business Enterprises) reform. The present study examines IFRS overt options in an attempt to 1) review the choices made by Chinese companies to discover -in light of the applicable PRC GAAP (Chinese Local Standards) requirement of that time -whether they were more or less likely to choose an option than the other countries analysed by Nobes & Kvaal; 2) rank China's place within Nobes's accounting classification system; and 3) rank China' place, again in the Nobes's model but also in light of a recent study based on BRICS (Note 1)countries (Sarquis, et al. 2014). The results of the statistical analysis confirm that Chinese financial statements display a "local" nature in their use of IFRS and that in its accounting tendencies, China belongs to the Continental European group rather than with the other BRICS countries.

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Section: Relevant Scholarshipmentioning

confidence: 99%

International Differences in IFRS Policy Choice and the Persistence of Accounting Classification: The Case of China

Rossetti¹,

Verona²

2017

IJBM

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“…These researches were conducted in Asian countries, such as China and Japan (Cooke, 1991;Kikuya, 2001;Chen, Sun, & Wang, 2002;Taplin, Tower, & Hancock, 2002;Abd-Elsalam & Weetman, 2003;Xiao, Weetman, & Sun, 2004;Al-Shammari, Brown, & Tarca, 2008;Peng, Tondkar, Smith, & Harless, 2008). The methodology used is both empirical and normative/descriptive.…”

Section: Literature Reviewmentioning

confidence: 99%

Comparability of Company Accounts Using IFRS and US GAAP: Empirical Evidence of European and US Financial Statements

Taplin¹,

Verona²

2016

IJBM

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Purpose-The main objective of this study is to provide a judgment on the comparability of financial statements prepared under IFRS and US-GAAP. We developed two research questions for evaluating comparability within Europe (IFRS) and within the US (US GAAP) and for testing whether comparability is higher or lower when the US companies are included with the European countries.Design/Methodology/Approach-The T index framework was used to summarize the level of comparability for 13 accounting items using data from 250 companies.Findings-Empirical results are mixed. Of 13 accounting items considered, international comparability is significantly lower for 7 items and significantly higher for 4 items when the US companies are included. Furthermore, comparability amongst companies using IFRS is not consistently higher or lower than comparability amongst companies using US GAAP.Practical implications-Answers to the research questions may provide useful suggestions for IASB's current policy direction towards global accounting standards convergence, and in particular for the IASB-FASB convergence project. The results also have implications for companies or countries considering shifting to IFRS or US GAAP.Research limitations/implications-Lack of comparability within countries, rather than between countries, suggests a need to focus on reducing options within standards rather than on differences between standards or countries.Originality value-Our empirical results show that in most cases lack of comparability may be driven by options within a standard rather than by explicit differences between standards.

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“…Therefore, further studies on IFRS in other countries with different background are needed to provide substantiated evidence on whether or not IFRS adoption leads to improvement in the level of financial information quality as claimed by the standard setters. This is because the standards developed by the IASB are primarily aimed at countries with highly developed capital market, and it can be questioned whether the standards are optimal for countries categorized as developing and transitional capital markets and economies (Peng et al 2008). The institutional theory on the other hand asserts that coercive institutions such as accounting standards can affect practice and system of the companies, including financial reporting.…”

Section: Accounting Standards and Financial Information Qualitymentioning

confidence: 99%

IFRS Adoption and Information Quality: Evidence from Emerging Market

Rad¹,

Embong²

2014

AJAG

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Does Convergence of Accounting Standards Lead to the Convergence of Accounting Practices?

Cited by 72 publications

References 26 publications

International Differences in IFRS Policy Choice and the Persistence of Accounting Classification: The Case of China

International Differences in IFRS Policy Choice and the Persistence of Accounting Classification: The Case of China

Comparability of Company Accounts Using IFRS and US GAAP: Empirical Evidence of European and US Financial Statements

IFRS Adoption and Information Quality: Evidence from Emerging Market

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