Abstract
The aim of this research was to test the attitudes of professional accountants with regards to financial reporting issues. Given the changes arising from the adoption of the International Accounting Standards the expectation was that problems identified by prior research would have been mitigated. Surveys were conducted of accounting professionals using the questionnaire instrument designed by Francia and Strawser (1971). The data were collated and processed to determine the perceived information deficiency and importance of the various aspects of financial reporting. The major items in which information was considered to be deficient were – timing of revenue recognition, income tax effect accounting, executory contracts and treatment of prior period adjustments. By contrast the most important items were found to be uniformity in financial reporting, income tax effect accounting, use of fair market values, definition of equity versus liability and treatment of prior period adjustments. The findings have implications for the future development of accounting standards. Greater guidance should be given to explaining the practice, applications and consequences of the accounting standards on financial reporting. This paper provides a valuable insight into the perceived deficiencies of information on items that affect financial reporting by accountants in the Australian environment and adds a new perspective to the evaluation of adoption of international accounting standards.
Highlights
In January 2005 Australia adopted the International Accounting Standards, known as the International Financial Reporting Standards, as the basis for the issue of the Australian Accounting Standards
This paper provides a valuable insight into the perceived deficiencies of information on items that affect financial reporting by accountants in the Australian environment and adds a new perspective to the evaluation of adoption of international accounting standards
The emphasis placed upon achieving global harmonization of financial reporting has lead to the adoption of the international accounting standards either in full, as is the case in Australia, or in some form of modified acceptance
Summary
In January 2005 Australia adopted the International Accounting Standards, known as the International Financial Reporting Standards, as the basis for the issue of the Australian Accounting Standards. The decision to implement this sweeping change had been reached by the Financial Reporting Council in Australia in July 2002, and resulted in unprecedented change in the control over the financial reporting requirements in Australia (Deegan, 2010; Brown & Tarca, 2005). The adoption resulted in a number of significant changes in some accounting standards. As a result of these dramatic changes the accounting profession in Australia had to deal with a variety of concerns about the financial reports that emanated from the 2005 conversion (Haswell & Langfield-Smith, 2008). Among the sceptics was a large proportion of financial accounting professionals
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