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.     

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).     

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.     

(No) Limits to Anglo-American accounting? Reconstructing the history of the International Accounting Standards Committee: A review article

The development of the current International Accounting Standards Board (IASB) from the earlier International Accounting Standards Committee (IASC) provides insight into many issues of international financial reporting, among them the characteristics of international accounting standards themselves. This article reviews Camfferman and Zeff’s [Camfferman, K., & Zeff, S. A. (2007). Financial reporting and global capital markets. A history of the international accounting standards committee 1973–2000. Oxford: Oxford University Press] volume on the organizational development of the IASC and contextualizes it in the broader literature of cross-border standardization in accounting. While having produced a seminal piece, the authors take a clear Anglo-American perspective. The downsides are insufficiencies regarding a simplistic understanding of experts and expertise, a neglect of the role of auditing firms, and only an imbalanced integration of different stakeholders.     

Recent Evidence on Australian Current Value Accounting Practices: Is the Phoenix Rising from the Ashes?

There has been a perceptible movement in Australian accounting regulations towards various forms of current value accounting (CVA) in the past five years. These developments could reflect changing commercial attitudes to CVA in Australia. This paper presents evidence about the acceptance of CVA based on a survey of 176 public companies in Australia. It was found that the number of companies preparing comprehensive CVA accounts for external purposes has significantly increased since 1980. Furthermore, the majority of respondents rated a valuation basis other than historical cost as having more relevance to the resource allocation decisions of various users. While it is concluded that current value research is still an important topic for research and debate, the findings indicate that corporate acceptance of CVA will be continually hampered by a number of implementation obstacles.     

The Financial Reporting Practices of British Municipal Corporations 1835–1933: A Study in Accounting Innovation

This paper uses archival sources and contemporary literature to examine the development of the financial reporting practices of British municipal corporations. The paper explores the relationship between accounting theory, as embraced by the literature, and observed accounting practices, and examines both the environmental factors responsible for accounting change and the specific influences that proved crucial at particular points in time. The paper also shows that private-sector based explanations for accounting change do not apply to municipal corporations, and an alternative characterisation is presented.     

Does Securitization of Corporate Loans Lead to Riskier Lending?

This paper finds that loans sold to collateralized loan obligations (CLOs) underperform matched unsecuritized loans originated by the same bank. We find that banks put less weight on the hard information on borrower risk available to them when they set interest rates on the loans they sell to CLOs, and that they retain less skin in the game on these loans, suggesting that lax underwriting standards contributed to the worse performance of securitized loans. We also find that the median non‐CLO syndicate participant retains a lower stake in securitized loans when compared to loans that are not securitized, suggesting that these investors, like lead banks, expected securitized loans to perform worse.     

‘Old Hens Make the Best Soup’: Accounting for the Earning Process and the IASB/FASB Attempts to Reform Revenue Recognition Accounting Standards

Abstract

By developing a synthesis of documents that have been released officially under the revenue recognition project jointly run by the International Accounting Standards Board and Financial Accounting Standards Board, this article points out that the earning generation and realization process over time (that is to say, the traditional accounting model) is in reality still playing an important role without losing its raison d'être. Although this model is supposed to have been consistently rejected since the outset on the premise of the adoption of the assets and liabilities approach amid the Boards' attempt to establish a new revenue recognition model, this article aims to reconfirm the significance and validity of this earning process – that is, the corporate process of generating and realizing earnings over time – as the representational focus of accounting for revenue recognition. Through an internal critique, our article summarizes and discusses successive Boards' proposals under the same asset–liability approach that they have been advocating for revenue recognition. Through a comprehensive comparative analysis (external critique), our article further criticizes the usefulness and feasibility of this approach, especially the transfer-of-control basis of revenue recognition which the Boards propose. It argues then for an alternative approach that combines asset–liability with revenue–expense accounting while re-establishing focus upon the earning process over time.     

Does Fair Value Accounting Exacerbate the Procyclicality of Bank Lending?

This study investigates whether fair value accounting contributes to the procyclicality of bank lending. Using banks’ approval/denial decisions on residential mortgage applications to capture banks’ supply of credit, I find no evidence that fair value accounting has procyclical effects on bank lending over the past two business cycles. I further identify two reasons for this result. First, the main accounting item distinguishing fair value accounting from historical cost accounting—unrealized gains and losses on available‐for‐sale securities—does not affect lending decisions. Second, unrealized gains and losses on available‐for‐sale securities are not procyclical, as the risk‐free interest rate rises during some expansionary periods, resulting in unrealized losses, while the risk‐free interest rate (and sometimes the default spread) falls during some recessionary periods, resulting in unrealized gains.     

Conceptions of Learning and Approaches to Learning—A Phenomenographic Study of a Group of Overseas Accounting Students from Sri Lanka

This study explores conceptions of learning (SCL) and approaches to learning (SAL) of a group of Sri Lankan students studying accounting in an Australian university. The focus is on how cultural background and home country learning experiences shape SCL and SAL of these students. This research is based on the phenomenographic method, and semi-structured interviews are used for data collection. The results indicate that the interviewed students have lower-order conceptions of learning, and show characteristics of surface learning. Although the social approval motive was dominant in these students, it was not manifested in an achieving approach. Students in this study embrace the pedagogical tradition of the West, and engage in deep learning when they are exposed to research or practice-based assessments. Remnants from years of secondary education and aspects of a collectivist culture play a vital part in the ways in which these students perceive and approach learning. In addition, preconceptions of accounting as a vocation and a discipline strongly embedded in practice, drive learning conceptions and learning approaches.     

Who Influences the Design of Management Accounting Systems? An Exploratory Study

This paper outlines the results of an exploratory, survey‐based study of the relative influence of managers and management accountants on management accounting system (MAS) design. The findings reveal that, on average, corporate management have the stronger influence on MAS design. However, the strength of their influence does vary both across firms and the sub‐areas of management accounting and, in a significant number of cases, the management accountants’ influence is the greater. The results, therefore, suggest that the processes by which MASs evolve differ across firms due to the variation that exists in the influence exerted by these two parties in MAS design. This finding is significant for researchers studying change and difference in management accounting practice.     

Does acquisition lead to the growth of high-tech scale-ups? Evidence from Europe

The post-acquisition growth of high-tech scaleups has received relatively little research attention. This is surprising since buyers are known to target these firms for growth opportunities whilst sellers increasingly seek strategic partners to access resources to scale their ventures. We examine the post-acquisition revenue and employment growth of high-tech scaleups in a multi-country setting, comprising five European economies. Using a propensity-score matching approach and difference-in-differences regression, for a sample of 2187 high-tech scaleups, we demonstrate that acquisition has a positive effect on target firms equivalent to cumulative growth of revenue (employment) of 9–13 (6−10) percent after five (four) years, relative to control firms. We find that nationality matters such that the targets of foreign-owned acquirers exhibit significantly higher cumulative revenue and employment growth than their domestic counterparts. Taking a longer-term perspective, we show that growth dips in the first year, then stabilizes and accelerates in the years following acquisition, indicating a period of adjustment.     

Do Accounting Graduates’ Skills Meet The Expectations of Employers? A Matter of Convergence or Divergence

This study investigates the emphasis placed on technical and generic skills developed during undergraduate accounting courses from both the graduate and employer perspective. It is motivated by two issues. First, calls by the accounting profession and international education committees regarding the professional adequacy of graduates. Second, by the challenge facing educators and professional bodies to ensure accounting courses equip graduates with the necessary skills to add value to business. Data obtained from 174 graduates from an Australian university is compared with the perceived needs of a sample of employers. Major findings suggest that, while both groups acknowledged the importance of technical accounting skills, employers require a broad range of generic skills that graduates indicated were not being adequately taught in their accounting degree programme. Against this backdrop of skills convergence, the greatest areas of skills divergence from the employers’ perspective were those of team skills, leadership potential, verbal communication and the interpersonal skills of graduates.     

Accounting Education and the Prerequisite Skills of Accounting Graduates: Are Accounting Firms’ Moving the Boundaries?

The current requisite skills of accounting graduates guide the graduate attributes delivered by university learning outcomes. A recent trend by Australian accounting firms to outsource accounting services may impact on accounting graduates if entry‐level tasks normally completed by graduates are sent to offshore processing centres. This study examines the impact of the outsourcing of accounting services by Australian accounting firms and classifies the current requisite skills for accounting graduates identified by accounting firms. Following a review of the current academic literature, a positivist approach using empirical data is taken in this paper. The responses elicited from a survey questionnaire mailed to a random sample of Australian accounting firms provide information for the data analysis. One of the most widely outsourced services identified is the preparation of income tax returns, which has been identified as a key area where graduate accountants normally learn the basic skills required to phase them into the profession. Accounting firms that considered the outsourcing of accounting services would change the 12 ranked prerequisite skills for graduates presented in this paper in order of importance.     

Does the worldwide shift of FDI from manufacturing to services accelerate economic growth? A GMM estimation study

We examine the effect of manufacturing and service FDI (foreign direct investment) on their own sector growth, the spillover to the other sectors and the overall economy in host countries. We identify significant sectoral and inter-industry spillover effects with various data classifications and types of FDI flows. Evidence reveals that growth effect of manufacturing FDI operates by stimulating activity in its own (manufacturing) sector and is prevalent in Latin America-Caribbean, in Europe-Central Asia, middle to low-income countries and economies with large industry share. A surge of service FDI is likely to spur growth in service industries but hurt activity in manufacturing industries. Financial service FDI enhances growth in South-East Asia and the Pacific, high income countries and service-based economies by stimulating activity in both manufacturing and service sectors. However, nonfinancial service FDI drains resources and hurts manufacturing industry in the same group of countries. We conclude that a shift from manufacturing to service FDI is likely to lead to deindustrialization in certain regions and types of economies if this shift is spearheaded by nonfinancial FDI.     

Would Smog Lead to Outflow of Labor Force? Empirical Evidence from China

This study examines the impact of air pollution on labor outflow and labor migration from the perspective of individual and regional heterogeneity in China. The empirical evidence shows that air pollution has a significant impact on labor outflow and labor with higher education levels, of male gender, and belonging to a younger cohort are more sensitive toward air pollution and hence more inclined to migrate. The labor force from cities and rural areas, as well as from eastern and central China, tends to migrate due to the negative impact of air pollution. The labor force in areas of north of the Huai River is more likely to migrate due to the severe air pollution caused mainly by heating systems in the winter.