...European Union (EU) The European Union (EU) is a distinctive economic and political union. It was established on the first of January 1958 with 27 member countries. The EU is located primarily in Europe (European Union, 2013). France, Germany, Italy, Netherlands, Belgium and Luxembourg founded the Treaty of Rome in the year 1957 and established The European Economic Community. (The European Union, 2012) The European Union’s main aim was create a business environment that’s united by harmonizing taxes and laws of companies, to form incorporated capital markets and endorse openness between counties during good and labor transfer. (Aswathapa, 2010) EU Harmonizing efforts The European Union EU has worked to harmonize accounting standards within the EU by using two directives, which are the fourth Directive (1978) and the seventh Directive (1983) that were able to enforce laws. After applying the EU new accounting standards they decided in the year 1995 to transfer to international standards. Moreover, the transfer was done by following the IASC efforts. In the year 2000 the European Union requested all the companies to follow the IFRS standards when preparing consolidated statements. (Khan, 2008) The directives used by the EU were the most appropriate way to minimize the differences between the twelve European Union countries. According to Dedman (2010) “directives are legislative instruments from the commission to the member state “. According to the fourth and the...
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...Claremont Colleges Scholarship @ Claremont CMC Senior Theses CMC Student Scholarship 2011 The Effect of Culture on the Implementation of International Financial Reporting Standards Mitchell A. Skotarczyk Claremont McKenna College Recommended Citation Skotarczyk, Mitchell A., "The Effect of Culture on the Implementation of International Financial Reporting Standards" (2011). CMC Senior Theses. Paper 165. http://scholarship.claremont.edu/cmc_theses/165 This Open Access Senior Thesis is brought to you by Scholarship@Claremont. It has been accepted for inclusion in this collection by an authorized administrator. For more information, please contact scholarship@cuc.claremont.edu. CLAREMONT McKENNA COLLEGE THE EFFECT OF CULTURE ON THE IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS SUBMITTED TO PROFESSOR MARC MASSOUD AND DEAN GREGORY HESS BY MITCHELL SKOTARCZYK FOR SENIOR THESIS SPRING 2011 2 Table of Contents I. Introduction…………………….……………………………………………………………….4 II. Literature Summary………………………………………...………………...….……………..5 III. IFRS……………………...……………………………………………………..……………11 IV. Carve-outs…………………………………………………………………………………....18 V. Culture and Accounting………………………………………………………………………25 VI. Conclusion………………………………………………………………...…………………30 Appendix………………………………………………………………………………………...32 Bibliography……………………………………………………………………………………..37 3 I. Introduction As globalization increases at a blistering pace, more...
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...Different countries have different output despite whether the accountant follow a set of rules. This is because, even though accountant follows a set of rules, there are still possibilities that the set of rules does not covers every aspects in detail. This had led to room for professional judgements. It will be based on accountant’s judgement. The differences is not only between countries but it could differ within the country as well especially for Multinational enterprises (MNEs) it could be complicated as it involved different countries. MNEs can be defined as companies who offer products or services internationally. For instance, company XYZ’s headquarter is in Malaysia while its branch is in China. The existence of MNEs can be explained by Dunning’s eclectic paradigm. Firstly because the companies can gain access to assets that will gives them competitive advantages over local firms. Secondly due to the extent to which relative transaction cost make it appropriate for the companies to use such advantages themselves instead of to license or franchise to other firm and lastly, the existence of MNEs because of relevant cost and the government policies that encourage companies to perform production in other countries. MNEs can be classified into three groups: resource-seeking, market-seeking and efficiency-seeking. Resource-seeking is the search of resources in other country. While companies with market-seeking, they tend to establish subsidiaries. Those subsidiaries play...
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...------------------------------------------------- International Accounting Standards * Print * PDF * Cite * Comparable, transparent, and reliable financial information is fundamental for the smooth functioning of capital markets. In the global arena, the need for comparable standards of financial reporting has become paramount because of the dramatic growth in the number, reach, and size of multinational corporations, foreign direct investments, cross-border purchases and sales of securities, as well as the number of foreign securities listings on the stock exchanges. However, because of the social, economic, legal, and cultural differences among countries, the accounting standards and practices in different countries vary widely. The credibility of financial reports becomes questionable if similar transactions are accounted for differently in different countries. To improve the comparability of financial statements, harmonization of accounting standards is advocated. Harmonization strives to increase comparability between accounting principles by setting limits on the alternatives allowed for similar transactions. Harmonization differs from standardization in that the latter allows no room for alternatives even in cases where economic realities differ. The international accounting standards resulting from harmonization efforts create important benefits. Investors and analysts benefit from enhanced comparability of financial statements. Multinational...
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...国際会計基準審議会の発足 Q 国際会計基準審議会（IASB）の設立の経緯について教えてください。 A 1．IASC の発足および IOSCO の影響 国際財務報告基準（IFRS）の設定主体である国際会計基準審議会（IASB）は 2001 年から活動 を開始していますが、その活動は、前身の国際会計基準委員会（IASC）より引き継がれたもの です。 IASC の発足は、1973 年に遡ります。IASC は、世界 9 カ国（英・加・米・豪・蘭・西独・仏・墨・日） の職業会計士団体により設立され、日本からは、日本公認会計士協会がメンバーとして参加し ていました。IASC は発足以来、現在の国際財務報告基準の原型となる国際会計基準（IAS）を 作成していました。 1980 年代に入ると、1986 年に結成された証券監督者機構（IOSCO）からの働きかけを受けるな ど、IASC は新たな段階にはいりました。IOSCO は、米国の証券取引委員会（SEC）や日本の大 蔵省（現在は金融庁）など、資本市場の規制当局者により構成されていました。IOSCO が IASC に関心を持った理由は、1980 年代の国際資本市場の拡大、とりわけ多国間公募の拡大でした。 IOSCO は 1987 年 6 月から IASC の諮問グループのメンバーでしたが、1988 年 11 月に開催さ れた IOSCO の第 13 回メルボルン総会をもって正式に、IOSCO が IASC による IAS の改善作業 を奨励することおよび IASC の活動を支援していくことを表明しました。 IOSCO からの支持を受けて、IASC は、会計処理を可能な限り統一し国際的企業間比較を可能 にするという目標に向けて精力的に作業を行いました。1989 年 1 月に公開草案として E32「財 務諸表の比較可能性」を公表し、IAS の改訂作業を開始しました。6 年間にわたるこの比較可 能性改善プロジェクトは、1993 年 11 月にオスロで開催された IASC の理事会において 11 の基 準書が一括改訂されたことにより完了しました。 1973 年 国際会計基準委員会（IASC）の発足 1987 年 証券監督者機構（IOSCO）が IASC 諮問グループに参加 1993 年 比較可能性改善プロジェクトの完了 2000 年 2001 年 コア・スタンダードの完成 SEC のコンセプト・リリースの公表 欧州連合（EU）による IAS の EU 域内の上場企業への適用を決定 国際会計基準審議会（IASB）に組織改正 2002 年 米国財務会計基準審議会（FASB）と IASB によるノーウォーク合意 2．コア・スタンダードの完成と米国、EU の対応 比較可能性改善プロジェクトにより見直された IAS は、IOSCO にとって満足の行くものではあり ませんでした。このため、1995 年 7 月に IASC と IOSCO は、IAS を再度見直すことに合意し、 1999 年 6 月までに「包括的コア・スタンダード」を完成させることを公表しました。IOSCO が受入 れ可能と認めるコア・スタンダードが完成すれば、グローバルな市場でのクロス・ボーダーの資 金調達および上場目的のために、IAS の使用を認める勧告ができるとされていました。 このため、IASC は急ピッチでコア・スタンダードの完成に向けて作業を行い、2000 年 3 月のサン パウロでの理事会における...
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...IFRS Historical Background 1.1 Introduction The purpose of this chapter is to gather information about the history of the international financial and reporting standards (IFRS), the committee that issued them, and what the reasons behind issuing such standards are to be agreed and implemented across the world. In the following sections we will know more about the International Accounting Standards Committee (IASC) “The IFRS Issuer” foundation and launching. Then we will talk about the IFRS and the IASC development during the period of 1973 - 2000. How the IASC started to issue their international accounting standards and to what extent they were agreed and implemented across the world. And also what are the difficulties that faced them to issue accepted international accounting standards during this period. Finally, in the last section, the factors that forced the IASC to be restructured to IASB “International Accounting Standards Board”. Moreover, and after correspondence and deliberations, the Securities Exchange Commission (SEC) endorsement on the IFRS. 1.2 IASC Foundation and Launching: Following World War II, each country had its own Generally Accepted Accounting Principles (GAAP, the U.S. designation), or proper accounting practice. Even among the GAAPs in countries with active equity capital markets on which listed companies depended heavily for finance—the United States, Canada, the United Kingdom, Australia, and New Zealand—there were a lot of differences. In 1947...
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...COUNTRY REPORT SPAIN Submitted to: Dr. Fritz Rieger. Submitted by: Sai Krishna Gumparla. Student No: 103943448. Section: 03 Date of Submission: 10 July 2013. Spain, Span. España āspäˈnyä, officially Kingdom of Spain , the 13th-largest economy in the world, the fifth-largest in the European Union, and the fourth-largest in the Euro zone, based on nominal GDP comparison is a constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. It consists of the Spanish mainland (190,190 sq mi/492,592 sq km), which occupies the major part of the Iberian Peninsula; of the Balearic Islands in the Mediterranean Sea; and of the Canary Islands in the Atlantic Ocean. Ruler: King Juan Carlos I (1975) Prime Minister: Mariano Rajoy (2011) Land area: 192,819 sq mi (499,401 sq km) Total area: 194,896 sq mi (504,782 sq km) Population (2012 est.): 47,042,984 (growth rate: 0.654%) Capital and largest city (2011 est.): Madrid, 7,254,321 (metro. area) Other large cities: Barcelona, 1,621,537; Valencia, 814,208; Seville, 703,206 Monetary unit: Euro (formerly peseta) GDP: 1.477 trillion USD Unemployment: 25.1% Inflation (CPI): 3.1% CULTURAL ENVIRONMENT: Overview Situated in south-western Europe, Spain's geographical diversity encompasses landscapes that range from deserts and coastal beaches to snow-covered mountains. Present-day Spanish culture, deeply rooted in tradition, has been carved by the many outside influences the...
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...International Business Research Vol. 2, No. 2 Harmonization of Accounting Standards through Internationalization Nikhil Chandra Shil, ACMA (Corresponding Author) Department of Business Administration East West University 43, Mohakhali C/A, Dhaka – 1212, Bangladesh Tel: 9887989(Off.) ext 253, 01819289589 (M) E-mail: nikhilacc@yahoo.com Dr. Bhagaban Das P.G. Department of Business Management, Fakir Mohan University P. O.: Balasore, Pin.: 756019, Orissa, India E-mail: bhagaban_fm@yahoo.com Alok Kumar Pramanik Department of Commerce, Bhatter College P. O.: Dantan, Pin. : 721426, Paschim Medinipur, West Bengal, India E-mail: alokdantan@sify.com Abstract The journey to have a common set of accounting standards started long before to give it a professional shape and essence. And accountants all over the world feel the necessity to shorten the gap among different streams of accounting practices through harmonization. Still, we have a couple of strong variants of accounting practices (say, for example, US GAAP, UK GAAP, IAS etc.) over the world existed and practiced simultaneously. These variants are working as threats towards harmonization of accounting practices. However, the profession has also witnessed some improvements in recent years in the process of global convergence putting some ray of hope. International and even local standard setting bodies have come up with projects of harmonization and in most of the cases became successful. The day is not far away when we will observe...
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...accounting standardisation where harmonisation allows countries to have different accounting standards provided that they do not have logical conflict with the International Accounting Standards Board (IASB). Therefore the accounting standards in different countries are not identical but very similar from one to another which allows convergence of accounting practices. However, standardisation of accounting has the direct opposite meaning of harmonisation where the standardisation requires all accounting practices in various countries to be exactly the same. Harmonisation tends to be associated with IASB which carries out the process of coordination whereas standardisation is the process of uniformity that can be seen in the European Union (EU) where transnational legislation occurs. According to various accounting scholars, they said it is important to distinguish between harmonisation of accounting practices (de facto) and harmonisation of accounting regulations (de jure). De facto is often associates with harmonisation while de jure is associated with standardisation. Reasons for Harmonisation RELIABILITY OF FINANCIAL STATEMENTS FOR THE USERS One of the reasons that international harmonisation of accounting standards should be carried out is to ensure comparability, reliability and quality of financial reports and disclosure of foreign enterprises. This allows investors and financial analysts to understand the financial statements of foreign companies whose share they may...
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...Contents Contents Page………………………………………………………………………………………………………………………………………….1 Main Body……………………………………………………………………………………………………………………………………………….2 1. Harmonisation – what it means……………………………………………………………………………………………….…2 2. IASB’s reasoning for financial reporting harmonisation…………………………….………………………………..3 3. Approaches to harmonisation………………………………………………………………………..…………………………..4 4. Obstacles in harmonisation………………………………………………….……………………………………………………..6 5. The convergence between IASB and FASB today and the Changes within the IASB towards achieving their goal ……………………………………………………………………………………………………………………7 Conclusion ………………………………………………………………………………………………………………………………………………8 References & bibliography………………………………………………………………….…………………………………………………..9 1. Harmonisation – what it means Harmonisation is the process which aims to converge the accounting practices around the world and to increase the compatibility between countries in regards to financial statements. However, we must keep in mind that this process does not target uniformity in the accounting practice, but to reduce the differences over time. Standardising the accounting practices around the world comes as a boomerang effect of capitalisation. We have companies that trade in different countries and thus they must oblige with each of the accounting practices of every country where the company produces financial statements. This leads to the situation where you have a company reporting a shareholders’...
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...TB EXAM QUESTIONS Chapter 1 True False 1.Napoleon found the Italian system of accounting to be inefficient. 2.Venice’s commerce was driven by sea traffic. 3.The Genoese system was the first to imply that unlike items could be compared in terms of a common monetary unit. 4.Double entry bookkeeping quickly had world-wide acceptance, as the British accepted it in the 1400s. 5.When hyperinflation exists, alternative systems to historical cost become necessary. 6. The International Accounting Standards Board, an international organization dedicated to the diversity of accounting standards worldwide. 7. One trend in European securities markets is consolidation. 8. The continental accounting system is closely linked to the tax collection system. 9. The first step into international business is usually the creation of a foreign subsidiary. 10. If a firm is not involved in international commercial transactions, knowledge of international business is unnecessary. Multiple Choice Learning Objective #1.1: Identify the key trends in the development of accounting through history 1. The Crusades were important in the development of accounting, because __a. the Arabs first developed double entry accounting, which was then adopted by the Italians. __b. the Christians needed double entry accounting to keep track of the relative profitability of the different Crusades. __c. the trade routes shifted the commercial center from Italy to Constantinople ...
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...CHAPTER 2: REGULATION IN FINANCIAL ACCOUNTING Chapter 2 regulation in Financial accounting LEARNING OUTCOMES Upon completion of this chapter you should be able to understand: • The difference between management and financial accounting. • Why accounting regulations are important and required. • The need for and the structure of professional regulation, company law, stock exchange legislation and EU Directives. • How the different aspects of regulation work together and complement each other. • The process through which an accounting standard comes into being. REVISION RESOURCES EXAM QUESTIONS: Sample and Past papers are available from the website of Accounting Technicians Ireland and are essential aids when studying Advanced Financial Accounting topics. 7 Chapter 2 : Regulation in Financial Accounting 2.1 Advanced Financial Accounting the FunCtion oF FinanCial aCCounting and reporting The International Accounting Standards Board (IASB) in their Conceptual Framework for Financial Reporting state that ‘the objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity. Those decisions involve buying, selling or holding equity and debt instruments, and providing or settling loans and other forms of credit’. This Conceptual Framework...
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...organization and governance. IASB is London-based standard setting body for IFRS and unveiled proposal on valuation of financial instrument which had affected more than 120 countries in world. From the beginning, the EU has emerged as IASB’s main underwriter and clients. EU delegated European accounting standard to IASB and all listed companies have to follow IFRS, main purpose behind proceeding was to reinforce the establishment of a single European capital market. Why should countries adopt IFRS? 1. It follows consolidated financial reports 2. IFRS is flexible 3. In order to reduce books and ambiguity The IASC initiative to reduce international differences in accounting practices. During period of time many events led changes such as 1. To avoid preparing multiple sets of book under different accounting regimes 2. To harmonize global financial reporting systems 3. Scandals emerged from 1997 southeast Asia IASB gained international acceptance in 10th anniversary with around 120 countries excluding China, India, Russia, US. Australia and Hong Kong has adopted IFRS as it is. Japan permitting IFRS from 2010, Brazil and South Korea allowed from 2011, Mexico and Argentina from 2011, India starting convergence from 2011. European Union adopted IFRS in 2005 first time when 7000 EU companies has prepared report IFRS compliant. IASB gained global acceptance when japan allowed its domestic listed companies to report under IFRS with option of US GAAP. China started first convergence with IFRS...
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...Standards, GAAP, IASC 1. International Accounting Standards and Selected Middle East Stock Exchanges In an effort to generate comparable and reliable accounting information to help investors, creditors and others, each country has developed its own national financial accounting standards. These standards reflect the culture, history, and the characteristics of accounting problems facing that country. In some countries, the professional bodies formulate the financial accounting standards, while in many others governments and regulators establish these standards. As a result, much of the 20th century had witnessed a high degree of variation in the international accounting practices. International accounting diversity was one of the topics discussed in the tenth International Congress of Accountants in 1972. Accounting bodies of some countries attending the meeting were concerned in reducing the degree of variation in international accounting practices. As a result, in 1973, the International Accounting Standards Committee (IASC) was formed. The founders of this Committee included accounting bodies from Australia, Canada, France, Japan, Mexico, Netherlands, West Germany, the United States, United Kingdom and Ireland. Harmonization of accounting standards around the world was one of the main objectives of this Committee. Harmonization can be defined as the process of reducing the degree of variation in international accounting practices. Once established, the IASC started the...
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...Chen, S., Sun, Z. and Wang, Y., 2002. Evidence from China on whether harmonised accounting standards harmonise accounting practices. Accounting Horizons, 16(3), pp.183-197. Colasse, Bernard, and Noal Mellott. "The international standardization of accounting: the resistible rise of the IASC/IASB." In Annales des Mines-Gérer et comprendre, no. 2, pp. 15-24. ESKA, 2010. European Commission. 1995. Communication from the Commission, Accounting Harmonisation: A New Strategy Vis-à-vis International Harmonisation. Com, 95, p.508. Guggiola, G., 2010. IFRS adoption in the EU, accounting harmonisation and markets efficiency: A review1. The International Business & Economics Research Journal, 9(12), p.99. Hoogervorst, H. 2015. Ten years on, what have we learned? IASB Speech. Pacter, P. (2014) Global Standards: How Close Are We? Retrieved from http://www.ifrs.org/ Roberts, C.B., Weetman, P. and Gordon, P., 2005. International financial reporting: a comparative approach. Pearson Education. Schaub, A., 2005. Use of International Accounting Standards in the European Union, The. Nw. J. Int'l L. & Bus., 25, p.609. Tran, L. 2012. The Role of the FASB and the IASB in Establishing Fair Value Measurements. Fair Value Valuation Insights. Winter 2012. Whittington, G., 2008. Fair value and the IASB/FASB conceptual framework project: an alternative view. Abacus, 44(2), pp.139-168. Wong, P., 2004. Challenges and successes in implementing international standards: achieving convergence...
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