Evidence from China on Whether Harmonized Accounting Standards Harmonize Accounting Practices

Chen, Shimin; Sun, Zhen; Wang, Yuetang

doi:10.2308/acch.2002.16.3.183

Cited by 111 publications

(106 citation statements)

References 13 publications

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“…Kendall's mean scores show the sum of the ordinal ranking on the usefulness of each source of information assigned by each analyst. The highest ranking from this data indicates that the annual report was the most important information source of information for financial analysts, a finding supported by prior aggregate level studies (Chen et al, 2002a;Chen et al, 2002b).…”

Section: << Table 2>>supporting

confidence: 73%

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The appraisal of ordinary shares by Chinese financial analysts

Wang

Haslam

Marston

2011

Asian Review of Accounting

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Purpose -The purpose of this paper is to provides insights into recent financial analysis practice in the Chinese context. The paper examines the approaches pursued and information used by Chinese financial analysts in investment appraisal of ordinary shares. The research explores influences upon analysts' decision-making and how analysts perceived the Chinese investment environment.Design/methodology/approach -Questionnaire based survey approach is conducted in 2003 with 65 Chinese financial analysts.Findings -The findings indicate that fundamental analysis was the predominant technique adopted in appraising equities in line with the development of institutional investors and improved market efficiency. Regarding information used to analyse companies, annual reports constituted the most influential source. The Chinese analysts favoured usage of International Financial Reporting Standards (IFRSs) and International Accounting Standards (IASs) by A-share companies. The findings indicate changes within the financial analyst community, suggesting pressure for higher quality analysis and increased use of more sophisticated techniques despite ongoing market shortcomings. Opinions vary as to how important financial analysis is in influencing stock valuation or, crucially, upon socio-economic welfare. However, studies putting the analysts' role in perspective vis-à-vis other forces contribute to broadening understanding of this significantly under research area. This current study contributes to filling this gap.Originality/value -This paper provides insights into how specific country contexts influence financial analyst's investment appraisal practice both in incentives and information sources and techniques adopted

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Section: << Table 2>>supporting

confidence: 73%

“…Prior research shows there was a considerable gap between international standards and Chinese GAAP (Chen et al, 1999;Chen et al, 2002b). It was therefore considered useful to explore the perceived reasons for the gap.…”

Section: Changes In Financial Analysis and On Harmonisation Of Accounmentioning

confidence: 99%

The appraisal of ordinary shares by Chinese financial analysts

Wang

Haslam

Marston

2011

Asian Review of Accounting

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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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“…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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Evidence from China on Whether Harmonized Accounting Standards Harmonize Accounting Practices

Cited by 111 publications

References 13 publications

The appraisal of ordinary shares by Chinese financial analysts

The appraisal of ordinary shares by Chinese financial analysts

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

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