IFRS in National Regulatory Space: Insights from Sweden

Abstract

Based on two empirical cases, this paper illustrates and comments on the complexities of implementing and enforcing International Financial Reporting Standards (IFRS) in a national setting. The paper sheds light on the difficulties that arise in the local regulatory space when IFRS requirements start to shape national accounting legislation and regulations. The findings suggest that the investor focus and requirements for managerial judgement of IFRS can pose two problems. Firstly, an extended influence of IFRS creates tension with established institutions that have developed in the local accounting tradition. Secondly, local organisations can respond strongly to new IFRS regulations and their potential implementation, even if the contradiction with local practice bears no immediate economic consequence to them. The study contributes to the contextualisation of financial accounting in national culture by highlighting the different understandings and uses of IFRS by actors involved in the Swedish regulatory space.

Kamu Gözetimi Muhasebe Denetim Standartları Kurumu Muhasebe Bilgi Kalitesini Arttırmaya Yönelik Faaliyetlerinin Analizi

“…These findings reflect the arguments presented within the stream of research considering enforcement activities of national regulatory agencies (Quagli et al, 2020;Bradbury and Scott, 2020;Sten et al, 2010;Karampinis, 2021;Hartmann et al, 2020;Saoussen and Kobbi-Fakhfakh, 2020). The organization provides detailed examples of the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and the Cash Flow Statement for firms reporting according to either "IFRS 10-Consolidated Financial Statements" or "IAS 27-Separate Financial Statements".…”

“…Silva and Nardi (2020) point out that one of these challenges is the lack of regulator to guarantee compliance with IFRS, which resulted in low quality financial statements being published. Hartmann et al (2020) analyze the inherent difficulties faced by Swedish regulators in enforcing the IFRS requirements. The authors identify two issues that are causing problems for these regulators; judgment and investor focus.…”

A practical model to implementing IFRS in the national accounting system: The case of Azerbaijan

“…The results of these scientific studies have given rise to a layer of scientific developments, concentrated mainly on the substantiation of an effective model for the consolidation of NAS and IFRS in developing countries. Depending on the ratio of national standards and IFRS and the scale of use of IFRS, the following models of consolidation of national standards and IFRS have been developed and scientifically and practically justified (Silva, Fontes & Martins, 2021;Hartmann, Marton & Sols, 2020;Bengtsson, 2021):…”

“…These models assume the consolidation of IFRS from existing NAS without changes or through minor adjustments concerning listed (Mod.List) or all companies (Mod.Com) (Silva, Fontes & Martins, 2021;Madah Marzuki & Abdul Wahab, 2016;Maradona & Chand, 2018). The option of consolidation is possible due to significant changes in NAS or the development of new ones by IFRS (Mod.Dev), abolition of NAS, and the use of IFRS exclusively (Mod.Int) (Hartmann, Marton & Sols, 2020;Bengtsson, 2021). The opposite model is also possible, corresponding to the rejection of IFRS and the further use of national standards (Mod.Nat) (Hartmann, Marton & Sols, 2020).…”

“…The option of consolidation is possible due to significant changes in NAS or the development of new ones by IFRS (Mod.Dev), abolition of NAS, and the use of IFRS exclusively (Mod.Int) (Hartmann, Marton & Sols, 2020;Bengtsson, 2021). The opposite model is also possible, corresponding to the rejection of IFRS and the further use of national standards (Mod.Nat) (Hartmann, Marton & Sols, 2020).…”