Abstract
Purpose: Drawing on the experience of adoption of a model based on the International Financial Reporting Standards (IFRS) by Portuguese non-financial unlisted companies in 2010, called Sistema de Normalizacao Contabilistica (SNC), this paper explores auditors’ perceptions regarding dimensions of relevance and suitability of the new accounting model to the Portuguese setting, major problems encountered, and the main engendered benefits.
Highlights
The diversity of accounting systems around the world bears economic consequences to the interpretation of financial reporting at the international level and, impacts the consolidation of business affairs
The two major innovations introduced in the Portuguese accounting system by the International Financial Reporting Standards (IFRS) model – principle-based standards and fair value – were largely perceived favorably
By adding an enhanced understanding of the institutional context and its influence on the effects of the IFRS adoption, this research contributes to the accounting litera ture
Summary
The diversity of accounting systems around the world bears economic consequences to the interpretation of financial reporting at the international level and, impacts the consolidation of business affairs. Evidence suggests that SNC resembles the IFRS model at least close enough to have brought about a number of benefits that – according to the literature – would result from the application of such an accounting model: contextual benefits at country and business levels, opera tional benefits, and benefits at the level of statutory auditors’ profession. Despite all these encouraging evidence toward the success of the adoption process of SNC in Portugal, the process was not exempt from early difficulties, with some of them still ongoing, such as those related to fair value implementation and Notes preparation. The article concludes with a discussion of the academic and practical implications of the study and suggestions for future research
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