International Accounting Standards and Financial Reporting Uniformity: The Case of Trinidad and Tobago

Abstract

Abstract The paper has two purposes. First, it describes the financial reporting environment of Trinidad and Tobago before and after the adoption of International Accounting Standards (IAS) (currently called International Financial Reporting Standards (IFRS)) as the national standards of Trinidad and Tobago. Second, it examines the association between the adoption of IAS as the national standards of Trinidad and Tobago and the degree of uniformity of financial reporting among public companies. This study is useful because of the dearth of research on financial reporting in the English-speaking Caribbean and the effect of IAS on the degree of financial reporting uniformity within a country. Using an ex post facto research design, the financial statements of 18 publicly traded firms for the year immediately prior to the adoption of IAS (1987) and four years during the period following the adoption of IAS (1995, 1999, 2002 and 2003) were subjected to content analysis. Overall, the uniformity of financial reporting practices among publicly traded firms in Trinidad and Tobago increased following the adoption of IAS. This finding was fairly uniform across all the financial statement items examined though the magnitude of the change varied. It was directly attributed to the adoption of IAS for only three financial statement elements.