Set Of Accounting Standards Research Articles

O IASB: Das Informações Contábeis de Alta Qualidade em Direção às Informações para Fomentar Confiança e Estabilidade nos Mercados Globais

Since 2001, the International Accounting Standards Board (IASB) embarked on its mission to become the glo-bal accounting standard-setter. In the first decade, there was a lot of goodwill towards this goal and the number of countries adopting the International Financial Reporting Standards (IFRS) grew slowly. By the end of the 2000s, the economic landscape changed. First, in the aftermath of the financial crisis, doubts whether the IFRS contributed to market fluctuations during such a crisis came up. Second, the introduction of IFRS for small and medium-sized en-terprises (SMEs), comprising companies not listed in the European Union, has not been successful, many large coun -tries maintained generally accepted accounting principles (GAAP) of their own. Third, the wish of the U.S. authorities to allow domestic firms to use the IFRS for listing purpo-ses on U.S. stock markets decreased dramatically. In order to adapt to a changing landscape and to keep its role as a vibrant global accounting standard-setter, the IASB carried out an agenda consultation. The IFRS Foundation reviewed its effectiveness and its structure. The IASB decoupled the review of the conceptual framework of financial reporting from the review by the Financial Accounting Standards Board (FASB) and recently the IASB has also adapted its Mission Statement.

The field as our classroom: Applications in a business-related setting

Abstract The ‘field-trip’ as part of the educational experience is not new, and issues associated with it have been explored in the literature from a variety of perspectives. Site-visits and work experience-based placements provide the potential to add value to the educational experience of students across and within multiple sectors. But not all field-trips are equal, both in terms of their nature and their learning outcomes. In this teaching note, we document the use of the field as our classroom in two distinct settings, both of which are full subjects in themselves: one at the undergraduate level, the other at the postgraduate level. The first is an International Accounting Study Program conducted twice a year to Europe and the United States. The trip is shared with another university in Australia and includes three weeks of travel, visits to host organizations, and presentations to students by senior executives and representatives of business, the accounting profession, regulators, academics, and standard setters. The second subject is a Business Practicum subject whereby students spend two weeks on a ‘consulting-type’ assignment for a host organization. In particular, we focus here on one of these practicums, where eight students and two staff traveled to the remote mining town of Weipa in Far North Australia in the Cape York Peninsula to work on a business and marketing project with Rio Tinto Alcan and the local indigenous communities. This exposed staff and students to a business environment whereby a set of specific deliverables were expected of the students in an environment of cultural sensitivity. Using the theoretical lens of Kolb's (1984) Experiential Learning Model (ELM) as a framework to guide our discussion, this paper details each program, before highlighting the students' learning experience with respect to the four stages of the ELM. We draw on student reflections, assessments and host feedback to illustrate the enhanced and varied learning and educational experiences of such field-based settings. Moreover, we provide practical guidance for others wishing to pursue similar experiential learning experiences for their students.

Regards and Views toward International Accounting Standards Setting: A Critical Examination and Discussion

Regards and Views toward International Accounting Standards Setting: A Critical Examination and Discussion

Comparing US-GAAP and Iran-GAAP operating cash flows to predict future cash flows

Purpose – The main objective of this paper is to compare the ability of US-generally accepted accounting principles (GAAP) operating cash flows versus Iran-GAAP operating cash flows in predicting future cash flows. Design/methodology/approach – The sample comprises 240 firms (1,200 firm-years) during the period from 2004 to 2008 for which operating cash flows and other variables are available. Cross-sectional and panel data regression models are used in testing the hypotheses. Findings – This study finds that operating cash flows based on Iran-GAAP are no more effective in predicting future cash flows than those based on USA-GAAP, and the predictive ability of the model is improved by adding the earnings accrual components to the operating cash flows. Originality/value – The study suggests that the Iranian accounting standard setting committee recommends that the statement of cash flows be prepared based on the three-category model instead of the five-category model in an attempt to converge with the International Financial Reporting Standards. Consistent with Financial Accounting Standards Board and financial analyst recommendations, the results reveal that earnings are a better predictor than cash flows from operations.

MCDM Approach for the Adoption of IFRS for SMEs: Using Taiwan as an Example

Abstract With the trend toward the full adoption of the International Financial Reporting Standards (IFRS), the IFRS have recently become the only set of global accounting standards complied with internationally. Meanwhile, the International Accounting Standards Board (IASB) also officially announced the IFRS for small and medium-sized entities (IFRS for SMEs) in July 2009. Nations are evaluating whether to undertake selective local integration by amending the existing accounting system for SMEs, put into place a set of self-instituted standards by triggering the separation of accounting standards for SMEs and large entities, or to fully adopt the IFRS for SMEs. To effectively and accurately evaluate such convergent decisions, and at the same time solve this complex multiple criteria decision-making (MCDM) problem, this research applies the path-dependent theory under new institutional economics to examine the demand characteristics, cost effectiveness, and evaluation criteria of financial statements prepared by SMEs. It is expected that, through this research on the transformation of accounting systems, a MCDM model on the “IFRS for SMEs” will be successfully created to reflect national conditions that serve as references for nations in their formulation of policies concerning accounting standards.

Other Comprehensive Income: A Review and Directions for Future Research

Accounting standard setters continue to grapple with conceptual distinctions between components of net income and other comprehensive income (OCI). Bank regulators are dealing with the recommendations of Basel III for Tier 1 Capital, which includes more components of accumulated other comprehensive income (AOCI). Motivated by these standard setting and regulatory debates and changes, I review the literature on the investor and contracting usefulness of comprehensive income, OCI, OCI components, and AOCI. I present ideas for future research, including opportunities arising from Basel III changes to bank regulatory capital.

Perceptions of external auditors, preparers and users of financial statements about the adoption of IFRS 8

Purpose – The purpose of this paper is to explore the perceptions of external auditors, preparers and users (investors and analysts) of financial statements in Jordan about this new segmental reporting standard; a decision usefulness framework underpins the research. Design/methodology/approach – The objective of this study is to explore the perceptions of external auditors, preparers and users (investors and analysts) of financial statements in Jordan about this new segmental reporting standard; a decision usefulness framework underpins the research. Findings – The findings reveal that a majority of interviewees found that IFRS 8 was not a problematic standard, and that the management approach of IFRS 8 was an improvement on the previous standard – International Accounting Standard (IAS) 14R – because the information produced was seen as useful to users of financial statements. Moreover, the respondents indicated that there was an improvement in the quantity and quality of segmental information under IFRS 8 in annual reports for 2009; it was more understandable, relevant, reliable and comparable than the segmental information which had previously been reported. Research limitations/implications – No attempt was made to assess the usefulness of segmental information reported under IFRS 8 by Jordanian listed companies in their annual reports for other groups such as lenders, suppliers, customers, trade creditors and the general public (IASC, 1989). Thus, a survey about the impact of IFRS 8 on other groups may yield further insights about the decision usefulness of the new standard’s disclosures. However, Jordanians are not familiar with such research instruments and the culture within the society is relatively secretive (Piro, 1998). Practical implications – The findings of the current research should be valuable for international accounting standard setters at the International Accounting Standards Board. It provides some indication about the impact of this new standard. Originality/value – This research shows that segmental information reported under IFRS 8 is more useful for decision makers needs compared to segmental information that previously reported under IAS 14R. It also provides a great insight about the impact of this new segmental disclosure standard.

The Critical Aspect on Fair Value Accounting and its Implication to Islamic Financial Institutions

Recently, fair value measurement and its implication in accounting standards have been increasing (Ramanna, 2006). One of the important aspects of financial reporting is measurement (Barth, 2007). Barlev and Haddad (2003) state that the fair value accounting(FVA) paradigm replaced the historical cost accounting (HCA) in the development of accounting standards that FVA is more value relevant that HCA probably did not provide the real financial information and income. However, previously studies mention that fair value accounting suffers from some serious limitations and disadvantages such as issues in market approach, income approach, and cost approach. Al-Yassen and Al-Khadash (2011) argue that accounting standard setters such as the International Accounting Standards Board (IASB) UK and the Financial Accounting Standards Board (FASB) U.S as well as other national accountingstandard setters provide high attention and long-term ambition to use fair value accounting as full measurement in all financial instruments. Islamic Financial Institutions (IFIs) that have different objectives and principles as well as have different financial products with conventional financial institution. This paper tries to explore critical aspects of the fair value accounting andits implications to Islamic Financial Institutions implications. This study concludes that that fair value accounting measurement provides many critical aspects to be implemented to Islamic Financial Institutions (IFIs). Additionally, AAOIFI proposed cash equivalent value as respond to fair value measurement that cash equivalent value when the attribute condition are present such as the relevance, reliability and understandability of the resulting information. Furthermore, fully adopting International Financial Reporting Standards (IFRS) issued by IFRSIASB, there will no specific standards for unique functions of Islamic Financial Institutions. Inaddition, the paper may be recommended to work together among Muslim countries to unity the potential harmonizing one set accounting standards for Islamic Financial Institutions such as AAOIFI?s standards.

On the Convergence of Accounting Standards

The initiative towards the convergence of accounting standards driven by the International Accounting Standards Board (IASB) appears un-stopable. This paper first examines why having a set of national accounting standards is valuable. However, the underlying accounting model at the national level means that the logic may not extend to de facto convergence and the debate is played out as debates on implementation issues and fair value accounting. If de jure convergence materializes, International accounting faculty will need to shift their teaching and research focus from the differences in national standards to the differences in implementing a set of international standards.

All for Nothing? Accounting for Land under Roads by Australian Local Governments

Accounting for land under roads by local governments has been one of the most controversial and protracted episodes in the setting of Australian accounting standards. However, after more than two decades of exposure drafts, regulation, transitional provisions and re‐regulation, most land under roads has not been recognised in local government balance sheets. Australian Accounting Standard AAS 27 Financial Reporting by Local Governments was first issued in 1991 and, among other significant reforms, proposed that local governments report land under roads as an asset in their financial reports. However, persistent opposition to this requirement and practical difficulties associated with its implementation gave rise to a succession of transitional provisions deferring its mandatory application. Finally, in 2007 – 16 years after AAS 27 was first promulgated – the Australian Accounting Standards Board (AASB) sought to bring closure to this issue with the release of AASB 1051 Land Under Roads. However, in the interim some state governments had pursued their own resolutions, forbidding the recognition of land under roads. This research reports the results of a survey of the impact of land under roads on local government financial reports. After two decades of debate and regulation, diversity is found to persist in the extent and manner of recognition of this ‘asset’. However, recognition remains the exception rather than the norm and is typically confined to recent acquisitions that comprise only a very small portion of total assets. These circumstances are suggestive of an episode of regulatory failure.

Studying information content of operating cash flow in disclosure method

Disclosure of operating cash flow in different ways (direct and indirect ways), there has always been a contradiction between the standard policy makers and academic literature on the one hand and the practice of the accounting profession on the other hand. Iran's Accounting Standard No. 2, consistent with SFAS 95 in the U.S., IAS 7 in sets of international accounting standards and standard of FRS 1 in the UK, considers direct way disclosure of operating cash flow the most useful method. However, the accounting profession and in practice, the indirect method is the predominant method. In this study, we tried to compare the informative content of both disclosure of cash flow method using data for 14 member companies in Tehran Stock Exchange (the period of 1998 till 2011). Hypothesis test results showed that in general the direct method can better predict future operating cash flow. However, the indirect method of regression model in firms that have low debts have a better predictive power, On the other hand, companies with high organizational complexity, companies with a high return on assets and also companies with increased liabilities, the information content of both direct and indirect regression

Questioning the uncritical application of translation and back-translation methodology in accounting: Evidence from China

The ‘critical bite’ in this paper lies in providing evidence to challenge the continued and uncritical application of translation and back-translation methodology by the global standard setters and researchers. We applied a within-subject experimental design to examine the influence of translation and back-translation methodology on subjects’ judgments on the key conception of control when preparing consolidated financial reports. Semi-structured follow-up interviews were also conducted with randomly selected participants in the experiment. China provides a particularly appropriate national context for this study because Simplified Chinese is one of the most complex languages. Importantly, control, as the consolidation criterion, may be linked to the ‘invisible power’ of the Chinese government’s authority in the process of social control. The results show that subjects made inconsistent judgments on control in the research instrument in English and the same instrument translated into Simplified Chinese. Additionally, subjects expressed a preference for the legalistic approach, which concentrates on providing specific quantitative criteria and requires little exercise of preparers’ judgments. We suggest that the global accounting standard setters and accounting researchers may consider developing more holistic methodologies for translation. Possible Anglo-American biases, simplistic assumptions and marketing claims by the global accounting standard setters need to be critically examined.

Fair value in International Accounting Standard setting: literature review and critical analysis on its practice in the different accounting standards

Recent years have been marked by major changes to the process of standardisation and harmonisation of international accounting. In most countries, although imposed by the IAS 39 standard on financial instruments, fair value is particularly challenging. But why is fair value imposed as a valuation model in accounting standards? Thus, the object of this paper is to present a state of the art and debate the use of the fair value in financial assets accounting.

Regards and Views toward International Accounting Standards Setting: A Critical Examination and Discussion

Accounting information is the basis for the stakeholders who take different economic decision time to time by assessing those accounting information reported by the business organization. That’s why; international accounting standard setting committee aims to protect the interest of the stakeholders by formulating a high-quality reporting standard. But this standard setting process is hindered by many external lobbying groups like government, political, economic and corporate group because there are the agency and other problems. This study aims to examine and discuss the theoretical and conceptual frameworks like different approaches and theories like a free market and regulatory approach. Moreover, it is still a debate whether free market or regulatory approach ensures the interest of the stakeholders more. However, this study identifies that standard setting process should be a holistic approach that should protect the interest of not only the stakeholders but also the organization.

What factors are perceived to influence consideration of IFRS adoption by Vietnamese policymakers?

International Financial Reporting Standards (IFRS) developed by the International Accounting Standards Board (IASB) are designed to be a single high quality set of global accounting standards. IFRS were originally developed to serve the listed companies in developed capital markets. However, IFRS are increasingly being adopted by emerging economies, disregarding the concerns of the relevance and appropriateness of IFRS to those economies. It has been argued that emerging economies had little choice but to proceed with IFRS upon pressures from external forces. This paper users survey evidence to examine the perceptions of Vietnamese accountants regarding pressures for IFRS adoption on Vietnamese policymakers. Although the Ministry of Finance of Vietnam announced its intention to align Vietnamese accounting legislation with IFRS in November 2013; they have not yet determined the roadmap and pathway for IFRS adoption or convergence. The findings may allow the accounting practitioners, educators, and policy makers to prepare themselves for the change that Vietnam might pursue regarding IFRS.

Monopoly versus Competition in Setting Accounting Standards

Financial accounting standards are set by organizations granted a significant degree of monopoly power by various governments. While there has been considerable debate on the merits of national (e.g., US Financial Accounting Standards Board (FASB)) versus international (International Accounting Standards Board (IASB)) monopolies, little attention has been paid to the merits of using competing standard‐setting organizations (SSOs) for setting accounting standards. We compare the standard‐setting processes of the FASB/IASB to the processes of four technology‐oriented SSOs to assess the role of competition. We also provide a case study of monopoly and competitive standards in telephony. Both telephony and accounting yield some gains from coordination, and similar arguments are used (under the labels of comparability and consistency of accounting) in debates about granting a monopoly to their respective SSOs. Our results show that a group of volunteers competing with the government‐sanctioned monopoly of International Telecommunications Union transformed the telephone industry. Thanks to this standards competition, we enjoy free video internet calling and massive cost savings. Implications for accounting standard setting are discussed.

The New Chinese Accounting Standards and Audit Report Lag

The audit report lag, defined as the period between a company's fiscal year‐end and the audit report date, has been considered to be one of the few externally observable audit output variables allowing outsiders to evaluate audit efficiency. Prior research on the determinants of the audit report lag has investigated a common set of firm characteristics, including firm size, fiscal year‐end, loss occurrence, presence of extraordinary items, client complexity, and audit opinion. However, there is scant research on the effect of changes in reporting regulations on the audit report lag. This paper examines empirically the effect on the audit report lag of a new set of Chinese accounting standards introduced in 2007 that were based on the fair value accounting system. We document empirical evidence of a significant increase in the audit report lag in China after the adoption of these new accounting standards. This increase, however, is more pronounced for clients audited by small audit firms.

Questions of Introducing and Teaching International Standards in Georgia

In terms of perfecting the market economy system in the country, introducing and exploiting the mechanisms of accounting and reporting facilitating the economic relations between the countries and making the economic results comparable is problematic. Many countries had or still have a similar problem. Georgia tried to solve this problem by the combined actions of the legislative and executive bodies. Changes in this direction have posed certain problems to the academic sector, too, and solving them has become quite urgent. This complex of problems has become the subject of the present study. The goal of the study is to consider the role of international accounting standards in Georgian economic system. Global economy has accelerated the need to move toward global accounting standards. Implementation of the international standards helps the countries to save on financial, human or other resources. Engaging in such a process is particularly beneficial for the countries with scarce resources. With their intellectual resources and by considering their past experience, they can make a valuable contribution to the international cooperation. Consequently, the purpose of the study was further specified to orient on the questions of introducing and teaching the international standards, identifying future trends in this direction, particularly for small countries like Georgia is, and demonstrating the positive role of the academic sector in this process. Georgia was successful in harmonizing the technical and professional standards in accounting and audit with the international standards. Several governmental and non-governmental organizations are participants of this process, namely the Parliament of Georgia (drafting the relevant legislative acts), Georgian Federation of Professional Accountants and Auditors (GFPAA), Accounting Standards Commission, Auditorial Activity Council and others. Conclusion is that it is both timely and necessary to converge and harmonize global (world) and local (country) standards into a single set of Global Accounting Standards. This will lead to a more stabilized and prosperous world economy, also it will help to resolve many of the world's financial reporting problems.

Monopoly versus Competition in Setting Accounting Standards

Financial accounting standards are set by organizations granted a significant degree of monopoly power by various governments. While there has been considerable debate on the merits of national (e.g., US FASB) versus international (IASB) monopolies, little attention has been paid to the merits of using competing standard setting organizations (SSOs) for setting accounting standards. We compare the standard setting processes of the FASB/IASB to the processes of four technology-oriented SSOs to assess the role of competition. We also provide a case study of monopoly and competitive standards in telephony. Both telephony and accounting yield some gains from coordination, and similar arguments are used (under the labels of comparability and consistency of accounting) in debates about granting a monopoly to their respective SSOs. Our results show that a group of volunteers competing with the government-sanctioned monopoly of International Telecommunications Union transformed the telephone industry. Thanks to this standards competition, we enjoy free video internet calling and massive cost savings. Implications for accounting standard setting are discussed.

GAAP convergence or convergence Gap: unfolding ten years of accounting change

Purpose – The purpose of this paper is to add to the literature on accounting change in explaining a decade-long effort by the FASB and IASB to develop a set of global accounting standards accepted by markets worldwide. This research studies the effort as one of “convergence” in accounting standards and aims to bring theoretical and empirical clarity as to how we can conceptualize the notion of convergence. Design/methodology/approach – Through a longitudinal study of 23 key FASB-IASB projects undertaken between 2002 and 2011, this paper analyzes processes of accounting change using a blend of institutional theory and political economy. A process perspective provides a method to unfold variants of accounting change by identifying patterns that help us to understand the conditions for and characteristics of convergence. Findings – The author highlights specific variants of accounting change observed during the convergence effort – direct emulation, difference reduction and progressive redesign – as analogo...