International Accounting Standards Research Articles

Exploring the accounting community perspective on the "Consultation Paper on Sustainability Reporting"

The International Accounting Standards Board (IASB) in January 2020 is-sued "Classification of Liabilities as Current or Non-current", which amended IAS 1 Presentation of Financial Statements. The main purpose of the amend-ments regards the classification of financial liabilities and how to classify them under particular circumstances. The amendments are proposed to be effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted. Due to feedback received and enquiries about the classification of financial liabilities with financial covenants, in December 2020 the IFRS Interpretations Committee (IFRIC) published a tentative agenda decision in response to such feedback. Subsequently, in October 2022 the International Accounting Stand-ards Board (IASB) published a document titled "Non-current Liabilities with Covenants (Amendments to IAS 1)". The purpose of this document is to clarify the conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments are ef-fective for reporting periods beginning on or after 1 January 2024. The classification of financial liabilities as current or non-current is an im-portant consideration for financial reporting purposes, as it can have a significant impact on a company's financial statements and financial ratios. Current liabili-ties are those that are expected to be settled within one year, while non-current liabilities are those that are expected to be settled beyond that time frame. The purpose of the following review is to analyse the main impacts of the amendments on the classification of the financial liabilities with covenants and the project's history and timeline.

Economics in primary schools: an empirical experiment from Hungary

The paper highlights the importance and relevance of introducing economic studies to primary schools. The research aimed to investigate the appropriate age, environment, type, and composition of presentation for introducing combined economic knowledge. The 190 students participating in the research were students from three primary schools in Hungary from 10 classes. Given the fact that in the case of all of the significant results, a sufficient effect size could be measured, and furthermore, the relevant test value was very high, it is unambiguously proven that the size of the sample (n = 190) that was used for the examination was sufficient. The results suggest that teaching economic and financial knowledge through accounting and making lectures interactive using special tools of positive education is critical to stimulating children’s interest. Eighty percent of the students in the study liked the combined and interactive lecture. Another goal was to investigate whether those that liked the presentation would perform better on the related knowledge test, which proved to be the case. In the two target groups, students in grade 6 outperformed students in grade 3 on the test. An investigation of gender performance is also included in the research. Findings suggest that the respective education may appropriately be developed based on the close relationship between mathematics and accounting. The lectures can be adapted according to any national or international accounting standards (IFRS, etc.) and can be taught in an online classroom as well. The lectures aim to develop children’s independent problem-solving skills so they can adapt the information to their own lives and financial situations. The paper fills a gap in the research by describing a successful attempt to complex economic literacy.JEL Classification codeA29, M21, M41

Financial Results of Ukrainian Enterprises: Peculiarities of Accounting Support for their Formation and Management

The theoretical foundations and features of accounting support for the formation of financial results of Ukrainian enterprises have been studied, taking into account the requirements of national legislation and international accounting standards. The system of accounting accounts for recording the formation of the financial result of enterprises is characterized. The study of the differences in the rules for calculating the financial result of enterprises and private enterprises, recognition of their income and expenses was deepened. The influence of the financial result on taxation (income tax and single tax) is analyzed. A detailed analysis of the composition of income and expenses for operating and non-operating activities and notes to financial statements made it possible to establish that the main determining factor in the formation of income is the net income from the sale of products (goods, works, services) and net earned insurance premiums, while the formation of expenses is operational expenses of Ukrainian enterprises.

Accounting and analytical provision of enterprise risk management in the conditions of the state of war: identification, assessment, measurement and display of risks

The research is dedicated to the current issue of improving the accounting and analytical support for enterprise risk management in conditions of a military state. It analyzes the processes of risk identification, assessment, measurement, and representation in financial reporting, taking into account International Accounting Standards and qualitative assessments. A conceptual approach is proposed to enhance the enterprise risk management process through the detailed implementation of three blocks of analytical procedures: research and identification, risk assessment, analysis, and neutralization, which involves its integration into the accounting and analytical support system for enterprise risk management. Based on the analysis of reporting of Ukrainian enterprises, the most common risks arising in modern conditions are identified. A classification of risks by their origin is proposed, allowing for the systematization of various types of reserves, provisions, and funds that are formed to reflect risk events in accordance with accounting standards. The analytical and applied support for risk representation in accounting is improved through the development of an analytical matrix of risk impact on events in reporting. It enables the consolidation of information on the likelihood and significance of risks in a unified format and establishes the appropriateness of reflecting reserves and provisions in accounting. The research results have practical significance and can be utilized by enterprises to enhance their risk management systems and effectively represent risk events in financial reporting, which will contribute to risk reduction and minimizing losses for enterprises in conditions of a military state

Using accounting theory to develop a theoretical model for credit card rewards programme transactions

PurposeAfter the effective date of International Financial Reporting Standard (IFRS) 15, the accounting treatment of credit card rewards programmes (CCRPs) is no longer explicitly prescribed. Uncertainty regarding what constitutes faithful representation, and the inconsistent accounting practices observed, has created a need for guidance on the appropriate accounting treatment of CCRP transactions. Accounting theory has the potential to provide the foundation for this guidance. As a result, the objective of this study was to develop a theoretical model for the accounting treatment of CCRP transactions using accounting theory.Design/methodology/approachThis non-empirical qualitative conceptual study utilised document analysis, focussing specifically on accounting theory, to construct an accounting treatment model.FindingsApplying the relevant accounting theory (International Accounting Standards Board's (IASB's) Conceptual Framework), a theoretical model for the accounting treatment of CCRP transactions was developed, which emphasises the importance of understanding the economic phenomenon (the CCRP transaction) and determining how management views the transaction (in isolation as marketing or as an integral part of the credit card transaction).Originality/valueAddressing the problem of accounting for CCRP transactions with reference to accounting theory (which is the main element of scholarly activity in accounting) distinguishes this study from previous research on the topic. The CCRP accounting treatment theoretical model could assist CCRP management in faithfully accounting for a CCRP transaction and reduce uncertainty and inconsistency in practice. Moreover, this study identified the procedures to be employed when using accounting theory to determine the appropriate accounting treatment of business transactions. These procedures could be employed by accountants when faced with other transactions not covered by specific accounting standards.

Accounting procedure for operations with cryptocurrency as a variety of virtual assets

The article examines the procedure for accounting transactions with cryptocurrency as a special type of asset. Circulation of cryptocurrency in Ukraine currently does not have proper legislative regulation, and the Law of Ukraine "On Virtual Assets" adopted in 2022 has not yet entered into force. There is no proper legal provision for accounting and taxation of transactions with cryptocurrency carried out by business entities taking into account the advantages of using a decentralized means of circulation. Solving the issue of proper accounting of cryptocurrency and operations with it will contribute to the unshadowing the economy and the receipt of taxes to the state budget.
 It has been established that cryptocurrency can exhibit characteristics of goods, cash and their equivalents, financial instruments, investment real estate, intangible assets, shares, etc. With this in mind, the article analyzes permissible options for classifying cryptocurrency and operations with it to specific classes of accounting accounts based on international and national accounting regulations (standards).
 The European practice of accounting for operations with cryptoassets is analyzed, which is based on two options for accounting for cryptocurrencies: as an intangible asset or as stocks. It was concluded that in the absence of a single methodical approach to the issues of proper accounting of cryptocurrency and operations with it, it is necessary to use international accounting standards and recommendations for accounting of cryptocurrency developed on their basis as an intangible assets (if it is held for sale in the everyday economic activity) or stocks (if held for the purpose of obtaining an investment profit from resale). The purpose of its use by the business entity should be the basis for selecting the recommended accounting options for cryptocurrency as a virtual asset.

Financial Regulations and Stability of Banking Systems: A Case Study of Citibank in Singapore

Financial regulations are essential for maintaining the stability and soundness of banking systems. These regulations establish guidelines and requirements for banks to ensure they have sufficient capital, manage liquidity effectively, and mitigate risks. By enforcing financial regulations, regulatory authorities promote transparency, protect depositors' interests, and prevent financial crimes. Ultimately, a robust regulatory framework contributes to a stable banking system that can withstand economic shocks and safeguard the overall financial health of an economy. The study found that the financial regulations imposed by the Monetary Authority of Singapore (MAS) have proven to be effective in ensuring the stability and resilience of the banking system in Singapore. Citibank has implemented robust risk management practices in accordance with the financial regulations in Singapore. Regular audits, inspections, and compliance assessments conducted by the MAS help maintain the integrity of Citibank's operations and promote a culture of compliance within the bank. The MAS actively participates in international forums, exchanges knowledge, and harmonizes regulatory standards to address cross-border risks and maintain the stability of the financial system. The study concluded that the MAS plays a crucial role in overseeing and regulating the financial sector in Singapore, with a primary focus on maintaining stability, ensuring sound governance, and protecting the interests of stakeholders. Excessive regulations may hinder innovation and impede the competitiveness of banks, while inadequate regulations may leave the financial system vulnerable to risks. The study recommended that financial regulations should emphasize the importance of transparency and disclosure, enabling stakeholders to make informed decisions. The MAS should encourage banks to provide clear and accurate financial statements and disclosures that adhere to international accounting standards. The regulatory framework should encourage banks to adopt and leverage emerging technologies such as artificial intelligence, blockchain, and digital identity, while ensuring robust cybersecurity measures and stringent data protection standards. Keywords: Financial Regulations, Stability, Banking Systems, Singapore

A Study of Recent Accounting Trends in India's Corporate Sector with Special Reference to International Financial Reporting Standards

Accounting is the process of keeping track of monetary transactions and data in a structured, consistent, and understandable style so that stakeholders in a business or organization may make informed economic decisions. Early forms of accounting used clay tokens to keep track of products and livestock, but the discipline has since evolved into a sophisticated system for recording a wide variety of financial transactions and details. The first step toward IAS, or International Accounting Standards, was done in 1959. Since then, accounting groups and others have collaborated to form the International Accounting Standards Committee. In 1997, the IASC was restructured to better enable the convergence of various national accounting standards and practices toward a single, high-quality set of global accounting standards. Established in 1973, it issued the foundational documents for what is now known as International Accounting Standards until the year 2000. As the International Accounting Standards Committee (IASC) was abolished in 2001, the International Accounting Standards Board (IASB) was tasked with publishing international accounting standards. The integration of global financial markets and the need of investors for more uniformity in the financial reports of multinational firms both demand the globalization of IFRS.

Income Components in the Italian and International Experience: From the Contraposition between Ordinary and Extraordinary Costs and Revenues to the Contraposition

The costs and revenues recognised in the profit and loss for users outside the company have evolved in various countries and at the level of international accounting standards concerning the juxtaposition of large aggregates of negative and positive income components. Over time, there was talk of costs and revenues without any contraposition whatsoever, even going so far as to state that a profit and loss was perfectly valid with three items recorded in such a document: total costs, total revenues, profit or loss for the year. Over time, this situation has completely changed both in Italy and internationally. In the 1990s, the profit and loss governed by the international IAS and the profit and loss governed by Italian civil law presupposed the contraposition of extraordinary costs and revenues. After this contraposition had been eliminated at the international level, discussions began in Italy about whether the contraposition between extraordinary and ordinary income components could be replaced with another contraposition using the term 'extraneousness' or 'not extraneousness' to the company's activity.

The Impact of Changes in Pension Accounting under IAS 19R on Shareholder Wealth

ABSTRACT This study examines stock price reactions to International Accounting Standards Board announcements associated with International Accounting Standard (IAS) 19R during the standard-setting process. IAS 19R removes the corridor approach in accounting for actuarial gains and losses on defined benefit plans. This rule change likely weakens the financial position of most firms that previously used the corridor approach upon adoption and subsequently increases balance sheet volatility. Using a sample of listed firms in Norway, we find that the market generally reacts negatively to IAS 19R events, but stock price responses are insignificantly different for affected and unaffected firms, suggesting that shareholders view the standard as value neutral. However, market reactions are more negative for firms with higher bankruptcy risk. Additional analyses indicate that market reactions vary with discretion in actuarial assumptions and funded status. Overall, our results document how investors respond to the amendments to pension accounting rules under IAS 19R.

International Accounting Standards and their Impact on the Banking Sector Performance

The performance of the banking industry in the Kurdistan area of Iraq is the focus of this study, which explores the influence that International Accounting Standards (IAS) have had on the situation. The purpose of this study is to determine the degree to which IAS has been implemented in the banking industry, the factors that have an influence on the implementation of IAS, and the effect that IAS implementation has had on the financial performance of banks in the region. Data was collected from a sample of 142 banking professionals located throughout the region using a quantitative research technique. According to the findings of the study, the percentage of financial institutions that have adopted International Accounting Standards (IAS) is rather low, and the majority of financial institutions continue to rely on their own national accounting standards. It was discovered that the implementation of IAS has a large and beneficial effect on the performance of banks, with fully adopting banks demonstrating improved levels of profitability, liquidity, and asset quality. Education and training were shown to be the most important predictor variables in the banking sector in the region when attempting to explain the adoption of International Accounting Standards (IAS). The lack of resources and technical knowledge in the region was cited as the reason for the sluggish adoption of IAS in the region. According to the findings of the study, there is a need to improve education and training, raise awareness of international accounting standards (IAS), encourage regulatory support, provide technical assistance, and promote international collaboration in order to increase the likelihood that IAS will be adopted in the banking sector in the Kurdistan region of Iraq.

Preventing profit manipulation and improving the quality of financial reporting through the audit judgement

Purpose : The objective of this study is to assess the perception of audit professionals on the importance of adopting Accounting and Financial Reporting Standard (NRCF) 4 - Accounting Policies, Changes in Accounting Estimates and Errors and International Accounting Standard (IAS) 8 - Accounting Policies, Changes in Accounting Estimates and Errors, essentially regarding the prevention of profit manipulation practices and the improvement of the quality of financial reporting. Methodology: A qualitative methodology was adopted by conducting structured interviews with four audit professionals. Results: The interviewees consider that the auditor plays an important role in the application of value judgments and validation of estimates, stating that their work is a deterrent to the practice of profit manipulation. They also consider that the auditor's ethics, professional skepticism, and degree of independence contribute to an improvement in the quality of financial reporting and a decrease in profit manipulation practices. Research limitations: The small sample size; and the limitations associated with conducting interviews were the main limitations encountered. Originality : This study is innovative in that it gathers the opinion of auditors and chartered accountants on a very relevant matter in the accounting field, given that standards increasingly call for the application of value judgments in defining accounting policies and estimates, as well as in changing them and detecting errors. Keywords: NCRF 4; IAS 8; Auditor; Accounting Policies; Estimates. https://doi.org/10.58869/EJABM008/SI03

The relationship between auditing industry specialization and the relative derivatives use for earnings management: evidence from China

PurposeThis study investigates the effect of auditing industry specialization (AIS) on the relative derivatives use for earnings management.Design/methodology/approachThe sample chosen in this study comprises 30,599 firm-year observations of Chinese public companies from 2005 to 2018. The sample is divided into two time periods (2005–2013 and 2014–2018) according to the year when IFRS 9 was implemented (IFRS 9, first discussed by the International Accounting Standards Board in March 2008, is based on an expected credit loss model for determining new and existing expected credit losses on financial assets. The definition was completed in July 2014 and implemented in 2018). AIS was gauged with respect to audit firms and individual auditors, and measured by market share in number and scale of clients. Linear regression is adopted to test hypotheses. Moreover, two-stage least square model (2SLS) is used to eliminate the concern of possible endogeneity.FindingsWhen gauged with respect to client scale, the scale-based AIS constrained the level of derivatives use for earnings management in the first period (2005–2013) while increased the level in the second period (2014–2018). The findings sustain for the analysis of audit firms and that of individual auditors, and for different definitions of AIS.Research limitations/implicationsThe positive AIS-IN relation after the adoption of IFRS 9 implies the sacrifice audit independence. This could be indebted to the government policy that favors local audit firms to be comparable to international Big 4 audit firms, and therefore results in competition among local auditors/audit firms in securing number rather than quality of clients.Originality/valueThe data of AIS in China are collected using a Python web crawler.

Does the income of the chief executive officer affect the quality of corporate financial statements? An evidence from industrial firms in Vietnam

Research aims: This study examines the relationship between the CEOs’ income and the quality of financial statements of industrial firms listed on the Ho Chi Minh Stock Exchange (HSX) during the three years from 2018 to 2020.Design/Methodology/Approach: This study investigated the influence of CEOs’ characteristics, particularly their income, on the quality of financial statements of listed firms in the Vietnamese industry by using features of information quality proposed by the International Accounting Standards Board (IASB). Ordinary Least Squares (OLS), Random Effects model (REM), Fixed Effects model (FEM), and Feasible Generalized Least Squares (FGLS) regressions were applied for empirical examinations.Research findings: The results of this study demonstrated that a CEO’s income positively affected the quality of corporate financial statements. Additionally, the analysis results confirmed the positive correlation between the firm’s size and the quality of disclosed reports, consistent with prior studies. However, this study uncovered that Big4 auditors did not influence the quality of financial statements.Theoretical contribution/Originality: This study contributes to the literature by providing a comprehensive perspective on the assessment of corporate financial statements quality and examining its association with the CEO’s income in the context of an emerging economy.Practitioner/Policy implication: The study is useful for investors and other financial statement users to assess the quality of corporate financial statements through the CEO’s profile; it also contributes as a scientific basis for firms to adjust the compensations offered to their CEOs.Research limitation: This study was limited by looking at the mono-directional impact of the CEO’s income on the financial statement quality. The following studies need a larger sample of industries and countries to strengthen the research findings. Also, further studies can broaden their perspectives to investigate the multidimensionality of this relation.

THE IMPACT OF MANDATORY ADOPTION OF INTERNATIONAL ACCOUNTING STANDARDS (IAS/IFRS) ON THE RELATIONSHIP BETWEEN ACCOUNTING ESTIMATES AND CASH FLOWS: AN EMPIRICAL STUDY

This paper aims to investigate the impact of the mandatory application of international accounting and financial reporting standards (IAS/IFRS) on the relationship between accounting estimates and future cash flows of Iraqi banks, the research sample listed on the Iraq Stock Exchange. The research sample included a large number of commercial banks listed on the Iraq Stock Exchange, including (18) banks for a ten-year time series from 2011 to 2020. The problem and hypotheses of the research focused on whether there was a discrepancy in the levels of accounting estimates and future cash flows for Iraqi banks. The research sample and whether the relationship between accounting estimates and future cash flows has improved in the period after the mandatory application of international financial accounting and reporting standards. The results show that there is a clear and large discrepancy in the difference between the current and future cash flows and the levels of accounting estimates during the research period as a whole and for the period before and after the mandatory application of international accounting and financial reporting standards. Importantly, the research results indicated that the predictive and explanatory power of accounting estimates has increased significantly after the application of international accounting standards in predicting future cash flows from the operational activities of Iraqi banks, the research sample. Accordingly, this may give a higher ability to managers in banks to make decisions more wisely and correctly in light of future expectations related to cash flows from their operational activities. The adoption of international accounting and financial reporting standards (IAS / IFRS) in the Iraqi environment will keep pace with the development taking place in the world, and therefore it is necessary to urge the regulatory authorities in Iraq to the compulsory application of accounting standards and international financial reporting at the level of various business sectors in Iraq Because of the great advantages that the standards enjoy, they will contribute effectively to increasing the quality of reports and financial statements and increasing the quality of accounting work as a whole, which is reflected importantly and positively on the level of the general economy of the country.

IAS 38 intangible assets and firm performance: Empirical evidence from selected consumer goods manufacturing companies listed in Nigeria

This study examined the effect of International Accounting Standards (IAS) 38 intangible assets on the firm performance of selected consumer manufacturing companies listed in Nigeria. The study employed secondary data extracted from the published financial statements of the sampled 15 companies out of a population consisting of 20 selected consumer goods manufacturing companies listed in Nigeria using a purposive sampling technique. A firm observation of 220 participants over 11 years from 2011 to 2021 was used in the study. Descriptive statistics and inferential analysis were adopted in the data analysis. The study revealed that intangible assets had a positive and significant effect on earnings per share (EPS) and the return on shareholders funds (SHF). The study concluded that the firm performance of selected consumer goods manufacturing companies in Nigeria was significantly affected by IAS 38 intangible assets. These findings suggest that compliance with IAS 38 standards is critical as it further deepens the relevance and faithful representation of financial statements prepared in Nigeria.

Understandability of Financial Reporting Requires Comprehensive Explanations and Not Mere References to Accounting Standards or Reports Attached to Financial Reporting

The understandability of Financial reporting requires that the profit and loss, the balance sheet, the notes, the cash flow statement and all the reports that, although not part of the Financial Reporting, constitute the company's communication to the outside world be intelligible and understandable by anyone reading a portion or all of the Financial reporting. And it should be noted that the person who has to understand everything set out in the financial reporting must, necessarily, have an even minimal basis of the concepts set out in the Financial reporting because it is impossible to draft a Financial report without using accounting terms or techniques that may be clear to a person who does not have the even minimal basis in accounting and financial reporting itself point. Understandability is achieved by applying national or international accounting standards, depending on the type of company in question, as well as civil law for companies obliged to do so, and by implementing the advice that the board of statutory auditors or auditors highlight in their documents and reports that they draw up during the audits that are periodically carried out in the company and that are drafted especially during the period of preparation of financial reporting. However, this article points out that merely referring to an accounting standard or a report by the board of auditors in which findings are highlighted and the consequent assertion that the accounting standard has been duly applied and all conclusions made by the auditors have been slavishly observed does not ensure the understandability of financial reporting. A particular analytical method must specify the accounting standard used and its involvement in financial reporting. In the presence of auditors' reports with findings, the findings made by the board of auditors must be explicit. It must be explained unambiguously in what manner and according to what accounting method the recommendations in the report in which the findings are highlighted in the accounting and corporate field were implemented.

ТЕОРЕТИКО-МЕТОДОЛОГІЧНІ АСПЕКТИ УПРАВЛІННЯ ДЕБІТОРСЬКОЮ ЗАБОРГОВАНІСТЮ ПІДПРИЄМСТВА

The article summarizes approaches to determining the essence of receivables. It was determined that scientists consider the company's receivables in the following directions: as a part of products sold but not paid for by customers; as a form of lending by the company to its customers; as one of the elements of current assets financed by own or borrowed funds. The compliance of national accounting provisions (standards) with international standards of accounting and financial reporting was analyzed, common features and differences of accounts receivable were identified.
 An assessment of the impact of receivables on the company's financial condition was made, the need to optimize its size and ensure timely collection of the debt was substantiated. Systematized measures to reduce risks in the management of receivables, aimed at ensuring control over the ratio of payables and receivables, which includes control, discounts, diversification of debtors, assessment of debtors and legal analysis of contracts, which includes risk insurance, self-insurance of risks, prepayment and limitation.
 An assessment of the control system of enterprises was carried out, since without it the amount of receivables may exceed an acceptable level, which will lead to a decrease in the amount of cash and the appearance of doubtful debts, which, accordingly, will reduce the revenue from the sale of products and the profit of the enterprise.
 The process of monitoring the company's receivables, which involves determining the maximum allowable amount of receivables, its analysis by types of debt, repayment terms, size and customers, is analyzed. The need to implement a set of measures to eliminate the causes that led to the emergence of overdue and bad receivables is substantiated, which involves assessing the borrower's creditworthiness by analyzing his financial condition, solvency and the probability of being declared bankrupt based on information from open sources.

The impact of the application of the International Accounting Standard (IFARS 9) on the financial reporting of Iraqi private commercial banks

The problem of recognizing credit losses is one of the most important contemporary problems in accounting thought, as the process of creating a provision for credit losses is one of the most important bases of measurement in hedging against these losses and mitigating their impact. Studies and research in the field of accounting show that the accounting treatment used in accordance with the international standard (IFRS 39) is one of the fundamental reasons for the exacerbation of the global financial crisis in 2008, which is the delay in the recognition of credit losses until they are achieved, which is the so-called model of actual credit losses, as the treatment is based on recognizing the loss on the actual basis, i.e. after its occurrence, and not on the expected basis, i.e. before it occurs. In light of the criticisms leveled at the international standard (IAS 39) entitled Financial Instruments, the International Accounting Standards Board issued a standard for financial instruments, which is the International Financial Reporting Standard (IFRS 9). The new standard includes a proposed accounting framework for recognizing expected losses. According to the requirements of this standard, banks create provisions to face risks on an expected or estimated basis with the aim of early recognition of credit risks. As a result of the effects that this application will have on credit risks. It was necessary to shed light on the impact of the application of this standard on reducing credit risk, and thus the financial reporting of Iraqi commercial banks will be affected.

Factors Influencing Accounting Outsourcing Using the Transaction Cost Economics Model

This paper presents the results of research conducted to identify the factors that influence the decisions of company management to outsource accounting services. A transaction cost economics (TCE) model was used to analyse factors that influence high levels of outsourcing of accounting tasks in the case of Montenegro, where, based on our sample, 75.4% of companies enter outsourcing arrangements with bookkeeping agencies or with external accountants. With an adaptation of International Accounting Standards (IAS) and legal requirements for submission of standardised year-end reports, there is evident growth of bookkeeping and financial service providers on the market and an evident trend of companies entering accounting service outsourcing with those agencies. A survey was developed to investigate 12 variables that, according to the TCE model, influence outsourcing decisions. The selection of variables was based on previous research in the field using the TCE or Resource-Based View model (the most common models used for this analysis). In contrast, new variables were introduced that measure the effects of the introduction of IAS through legal reporting obligations in Montenegro. By developing the model this way, it became possible to predict 47% of the variance of the dependent variable and to identify the main factors (other than price) that influence the decision of managers to outsource accounting services.