Management Attitudes Toward Adopting International Accounting Standards: How Japanese Management Attitudes Changed in the Past Decades

Abstract

The decade after the Big Bang saw great changes in the Japanese economy and Japanese business practices, as well as a global trend of convergence of accounting standards. Through the 1997, 2005 and 2008 questionnaires, the present research investigated Japanese managers’ attitudes toward the adoption of the IFRS, the current status of the application of the IFRS in Japanese companies and analysis whether there is the significant differences in management’s attitudes over the past ten years toward the adoption of the IFRS. By comparing 2008 data with 1997 and 2005 data, the present research found the following five results. (1) Japanese companies have still been great importance to the domestic stock market after 1997. (2) The difference between Japanese accounting standards and the IFRS has been clearly perceived by management. This perception changes over time; in particular, the difference in the standards for financial instruments and foreign currency exchange is regarded as insignificant, as in the past. (3) There is growing consideration that the application of the IFRS for separate and for consolidated financial statements of parent companies should be dealt with separately. (4) Japanese companies have shown a negative attitude to adopting the IFRS, with the main reason being that there is no legal requirement for such adoption. (5) Japanese managers expected that the costs would exceed the benefits for adoption of the IFRS. This expectation was stronger in 2008 than earlier.