Does Convergence of Accounting Standards Lead to the Convergence of Accounting Practices?: A Study from China

In this empirical study we examine whether China's efforts to converge domestic accounting standards with International Financial Reporting Standards (IFRS) over the past 15 years have resulted in the successful convergence of Chinese listed firms. This study is unique in that we evaluate convergence of firms' accounting practices from three perspectives: (1) the level of compliance with Chinese GAAP and IFRS, (2) the consistency of accounting choices under Chinese GAAP and IFRS, and (3) identification of significant differences in the net incomes produced under Chinese GAAP and IFRS (earnings gap).Using the 1999 and 2002 annual reports of 79 Chinese listed firms we find improvement in both compliance with IFRS and in the consistency of the accounting methods used in annual reports prepared under Chinese GAAP and IFRS. We also find a reduction in the earnings gap from 1999 to 2002. However, interestingly we observed that Chinese listed firms' compliance with IFRS is significantly lower than their compliance with Chinese GAAP. Overall we believe that our findings suggest that in China the convergence of accounting standards has been a conduit to the convergence of accounting practices.     

Implementation of International Accounting Standards in Poland: Can True Convergence be Achieved in Practice?

The aim of this study is to discuss the difficulties that Poland, as an example of a transition economy, has in complying with the underlying principles of IAS and to recommend changes that need to be introduced before true convergence to IAS can take place. The study identifies existing differences between Polish financial reporting and the IAS in terms of the underlying conceptual framework, using the treatment of fixed assets to demonstrate the fundamental differences between the two systems.

Using in-depth interviews supported with a review of the published financial statements for a sample of listed Polish and UK companies, the study found considerable differences between Polish accounting law and IAS. The article argues that those differences arise predominantly from the Polish legalistic and rule-based orientation that is incompatible with the principle-based spirit of IAS. It will be argued that, in order to achieve greater convergence to IAS, Polish accountants will need to move away from the system of uniform reporting towards broader, principle-based accounting.     

Do Harmonised Accounting Standards Lead to Harmonised Accounting Practices? An Empirical Study of IAS 39 Measurement Requirements in Some European Union Countries

The objective of this paper is to investigate the level of harmonisation for IAS 39 Financial Instruments: Recognition and Measurement and to identify if different levels of harmonisation are associated with company-specific factors. Based on Rahman et al. (2002) , we used the Jaccard (JACC) index to determine the level of harmonisation between IAS 39 and the financial reporting practice of a broad-based sample of European-listed companies in 2005. We applied regression analysis to identify companies' specific characteristics that affect the level of convergence of the reporting practice of financial instruments. The results of this study show a high level of harmonisation between accounting practices of European companies included in our sample and IAS 39.     

Sollen nach International Accounting Standards Abschlußaufwendungen aktiviert und eine Schwankungsrückstellung passiviert werden?

The aim of the International Accounting Standards Committee is to formulate and to publish accounting standards to be observed in the presentation of financial statements and to promote their worldwide acceptance and observance. There is only one International Accounting Standard (IAS) which treats a particular industry (IAS 30 for banks); for insurance companies does not exist a specific IAS. An International Accounting Standards ?Insurance“ is being developed at the moment. The discussion of the Steering Committee for the IAS ?Insurance“ regarding special topics, e.g. acquisition costs or the equalisation provision, was recently published in an ?Issues paper“. The objective of this study is to answer the question if acquisition costs should be deferred and amortized over the policy period and if an equalisation provision is allowed in the system of the IAS. For this purpose acquisition costs must be classified as an asset and an equalisation provision must be classified as a liability. In contrast to the standpoint of the Steering Committee this study shows that acquisition costs meet the requirements of the asset definition in the Framework to the IAS and an equalisation provision meets the requirements of the liability definiton.     

How have US banks adopted the Financial Accounting Standards Board's Level 3 fair value disclosure rules?

We examine how banks have complied with the Financial Accounting Standards Board's disclosure rules on Level 3 recurring fair value measurements. We document widespread noncompliance with the basic disclosure requirements. We also find that the noncompliant banks are smaller in size and are associated with lower audit quality, lower institutional ownership and less effective internal controls. Our results should be of use to regulators, auditors and audit committees in the United States, Australia and other countries for assessing the likelihood of noncompliance with fair value disclosure rules and improving the quality of fair value disclosures provided to investors.     

Discussion of “Comparing Alternative Hedge Accounting Standards: Shareholders' Perspective”

Review of Accounting Studies -     

Is Australia Moving Too Far Ahead of The United States in the Convergence to International Accounting Standards?

To understand Australia's position in financial reporting, it is necessary to examine the global environment in which the financial reporting of all countries is evolving. This article describes that global environment and Australia's policy and progress before answering the question of whether Australia is moving too far ahead of the United States in the convergence to international accounting standards (MS).     

The Use of Computers in Accounting Courses: A New Perspective—A Comment

This comment examines the framework put forward by Er and Ng (Accounting and Business Research, Autumn 1989) and calls for a more radical re-evaluation of the role of computers in accounting education.