The impact of national GAAP and accounting traditions on IFRS policy selection: Evidence from Germany and the UK

Haller, Axel; Wehrfritz, Martin

doi:10.1016/j.intaccaudtax.2013.02.003

Cited by 61 publications

(53 citation statements)

References 11 publications

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“…The findings of this study contribute to the international literature, by supplementing previous studies (Muller et al, 2008;Cairns et al, 2011;Andrade et al, 2013;Christensen & Nikolaev, 2013;Freri & Salotti, 2013;Haller & Wehrfritz, 2013;Souza et al, 2013), identifying that, even with the existence of accounting choices in IAS 40, there is comparability between the financial statements of firms from Brazil and Portugal.…”

Section: Final Remarkssupporting

confidence: 80%

Comparability of Accounting Choices in Future Valuation of Investment Properties: An Analysis of Brazilian and Portuguese Listed Companies

Souza

Botinha

Rogers

et al. 2015

Rev. contab. finanç.

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One of the main purposes for adopting the International Financial Reporting Standards (IFRS) is the quest for comparability between financial statements within the same country, over time, and between different countries. IFRS have the feature of allowing accounting choices in most of their standards. However, the existence of such flexibility in the process for recognizing, measuring, and disclosing assets and liabilities may impact on comparability. IFRS have been criticized both due to their accounting choices and the adoption of the fair value paradigm. This article examines these two issues, investigating the choice of the cost model versus the choice of the fair value model for investment properties (IPs), an option guaranteed under the terms of the International Accounting Standard (IAS) 40. This research aimed to identify the comparability degree and the factors that determine the accounting choices made by managers of IPs, in Brazilian and Portuguese listed companies, within the periods from 2010 to 2012. Comparability, within and between countries, was identified by the T-index and the search for the determining factors of accounting choices made by managers was performed by means of a logistic regression analysis. As a result, it was found that, despite the accounting choices allowed by IAS 40, there was a mean comparability between the accounting practices of firms in these countries, but showing a decrease in the index over the years. The explanatory factors identified were auditing by one of the big four (PricewaterhouseCoopers, Deloitte Touche Tohmatsu, KPMG, or Ernst & Young), companies' indebtedness, relative importance of IPs' balance, net profit, and less experience of Brazil in using the fair value method to appraise IPs.

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Section: Final Remarkssupporting

confidence: 80%

Comparability of Accounting Choices in Future Valuation of Investment Properties: An Analysis of Brazilian and Portuguese Listed Companies

Souza

Botinha

Rogers

et al. 2015

Rev. contab. finanç.

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“…[28][29][30][31][32][33] clearly explains the net realizable value. However, Paragraph 28 of IAS 2, which discusses the need to write down inventories below cost to net realizable value in certain situations, does not match any paragraph in AS-005.…”

Section: Comparison Of Ias 2 and As-005mentioning

confidence: 85%

“…For example, some studies survey companies on their perceptions about and experiences with IFRS adoption (e.g., Haller and Wehrfritz, 2013;Joshi et al, 2008). Some others conduct a content analysis of letters submitted to accounting professional bodies in Japan and the United States regarding IFRS implementation in their respective nations (Holder et al, 2013;Tsunogaya, 2016).…”

Section: Methodsmentioning

confidence: 99%

Empirically Investigating Saudi Arabian Accountants’ Readiness to Implement IAS 2

Al-Mousa¹,

Al-Adeem²

2017

FMIR

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This study focuses on practicing accountants in Saudi Arabia to examine their readiness to adopt the mandatory International Financial Reporting Standards (IFRS). More specifically, it investigates the International Accounting Standard for Inventories, an indicator for accountants' understanding of IFRS requirements. To do so, we conduct an online questionnaire survey, which reveals that 52.27% accountants may not be ready for IFRS implementation. The lack of knowledge about certain IAS 2 requirements raises further concerns about accountants' readiness to implement more complicated IFRS, some of which have no comparable local financial accounting standards. These findings draw attention to the effectiveness of IFRS training courses. Further, 57.20% accountants, all of whom reviewed the Saudi Organization for Certified Public Accountants' (SOCPA) website, provided appropriate answers, indicating SOCPA's significant contribution toward the spreading of awareness and knowledge about IFRS. Our findings have implications for practitioners and accounting regulators as well as bodies responsible for standardizing accounting practices in Saudi Arabia. In particular, they suggest steps necessary to increase accountants' readiness for IFRS adoption, which became mandatory since January 1, 2017, for all listed companies. In conclusion, this study serves as a foundation for future research on the topic, which can be extended to the realm of auditors, and obstacles confronting accountants in IFRS implementation.

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“…Corroborating this claim, Muller et al (2008) found that the probability that a company chooses the fair value method is greater where the pre-IFRS domestic standard required or allowed measuring assets at fair value. Haller and Wehrfritz (2013) similarly noticed that when companies adopt the IFRS, they tend to keep the required accounting policies or predominantly chosen under the national GAAP. Such reasoning leads us to test this hypothesis: H 4 : The probability that a listed company chooses the fair value method is greater in countries whose pre-IFRS domestic standards required or allowed measuring fixed assets, intangible assets, and IP at fair value.…”

Section: Methodological Aspectsmentioning

confidence: 98%

“…The issue that arises is the flexibility enabled to managers when applying the IFRS, given the existence of explicit and implicit choices, freedom of interpretation, and the need for estimate and valuation (Haller & Wehrfritz, 2013), so that, in practice, financial statements become less comparable, heading in the opposite direction from the IASB proposal. When managers act opportunistically, they may use the financial choices observed in the IFRS to increase earnings, highlight many items on the financial statement, or manipulate accounting figures (Detzen & Zülch, 2012), something which might indicate the practice of management of outcomes.…”

Section: Accounting Choicesmentioning

confidence: 99%

A comparabilidade das escolhas contábeis na mensuração subsequente de ativos imobilizados, de ativos intangíveis e de propriedades para investimento em empresas da América do Sul

Souza

Lemes

2016

Rev. contab. finanç.

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Expertise on comparability, accounting choices, and fair value is among the most controversial and poorly discussed themes in the current accounting scenario. Accounting choices are needed in order to guarantee a reliable representation, at the same time that their discretionary use may decrease the comparability level expected by the International Accounting Standards Board (IASB). In this article, we identified the comparability degree of accounting choices in the subsequent measurement of fixed assets, intangible assets, and investment property (IP) for listed companies in Brazil, Chile, and Peru, in addition to check whether certain entity characteristics can influence managers' accounting choice for fair value. Comparability was measured through the T-index and the explanatory variables were identified through regressions, within the period 2009-2013. It was found that, for fixed assets, national and international comparability increased after IFRS adoption, both increased over time. For intangible assets, there was not a substantial increase in national and international comparability. For IP, national and international comparability did not increase after IFRS adoption, their rates remained close to 0.50 (low comparability) in almost every year. Thus, IFRS adoption alone did not ensure comparability. By using regression analysis, we found that the characteristics industry, audit by big four, country, managers' remuneration, size, indebtedness, profitability, relevance, and time influenced managers' accounting choices, indicating the possibility that the choices under analysis have been used for management of outcomes.

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The impact of national GAAP and accounting traditions on IFRS policy selection: Evidence from Germany and the UK

Cited by 61 publications

References 11 publications

Comparability of Accounting Choices in Future Valuation of Investment Properties: An Analysis of Brazilian and Portuguese Listed Companies

Comparability of Accounting Choices in Future Valuation of Investment Properties: An Analysis of Brazilian and Portuguese Listed Companies

Empirically Investigating Saudi Arabian Accountants’ Readiness to Implement IAS 2

A comparabilidade das escolhas contábeis na mensuração subsequente de ativos imobilizados, de ativos intangíveis e de propriedades para investimento em empresas da América do Sul

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