Accounting Development and the Relevance of International Financial Reporting Standards in the Context of Small Island Economies - Using Briston’s Theoretical Foundation in the Context of Mauritius (1960-2008)

Abstract

Purpose - This paper examines the accounting development process and the relevance of International Financial Reporting Standards (IFRS) in Small Island Economies (SIEs) with particular reference to Mauritius. SIEs are different from large economies in terms of economic and political dependence, colonial influences, international pressures, as well as vulnerability to natural shocks.Design/methodology/approach - This paper uses (i) Briston’s Accounting Evolutionary Theory (BAET) (1978) and (ii) the Transcendental Stage of Accounting Development (TASD) proposed by Boolaky (2004) to explain the different stages of accounting development in Mauritius. Five factors influencing IFRS relevance (colonisation, regulation, accounting education, capital market and global business) are considered. Global business is for the first time brought into accounting literature to discuss the relevance of IFRS in small island jurisdictions.Findings - Mauritius has experienced little difficulty compared to other countries in the African region such as Madagascar, Mozambique, Angola, Swaziland etc. in its accounting development process because (i) it is used to the Anglo-Saxon accounting system, (ii) has adopted the phase-by-phase development process, (iii) has an adequate supply of professionally qualified accountants and (iv) made IFRS compliance mandatory in 2001 through the revised Companies Act 2001 and through the revision of other related legislations. As regards IFRS relevance, Mauritius has a conducive legal, political, business and economic environment to sustain IFRS.Implications - This study has applied BAET to examine accounting development from basic book-keeping to IFRS adoption in Mauritius. It also explains that there is a transcendental stage of accounting development which BAET has not taken into consideration.Originality - There is no previous study which has used BAET and TASD to examine accounting development and IFRS relevance in small island jurisdictions. This paper, therefore, provides a basis for future research in similar jurisdictions