Using international standards as a complement to overcome the unachieved nature of local GAAPs

2016 ◽  
Vol 17 (3) ◽  
pp. 356-376 ◽  
Author(s):  
Mohamed Faker Klibi
Keyword(s):  
Developing Countries ◽  
Accounting Standards ◽  
Document Analysis ◽  
Financial Statements ◽  
Listed Companies ◽  
International Standards ◽  
International Accounting Standards ◽  
Content Type ◽  
Accounting Professionals ◽  
Local Standard

Purpose In recent years, Tunisian listed companies have been preparing their financial statements under a hybrid set of accounting standards; a mixture of national and international standards. The purpose of this paper is to empirically verify to what extent this particular form of de facto compliance with IAS/IFRS (which are not authorized in Tunisia) is used among listed companies. The paper further analyzes accounting professionals’ perception of the current state of Tunisian standards and their attitudes in the absence of relevant national Generally Accepted Accounting Principles (GAAPs). Design/methodology/approach Two methodological approaches were used to answer the paper’s research questions: a document analysis approach and a survey questionnaire. Findings The document analysis revealed that a growing number of listed companies complement local GAAPs by standards they select among IAS/IFRS. The perception study indicated that Tunisian Accounting Standards are, indeed, less suitable for listed companies’ needs. Accordingly, when there is no local standard to measure a specific transaction or event, accounting professionals seem to have no problem in using some IAS/IFRS as a complement to overcome the unachieved nature of local GAAPs. However, the overall findings are likely to suggest that international standards used must not conflict with the Tunisian conceptual framework’s provisions. This means that the use of IAS/IFRS in conjunction with local GAAPs is generally perceived as being beneficial to the quality of financial statements. Research limitations/implications This study may be of interest to many developing countries that have not continued the harmonization of their accounting standards with IAS/IFRS. Future research should focus on the reasons which have led to this unachieved harmonization and the consequences of the normative gap which might emerge. Practical implications Previous research has often shown how difficult it is to apply international accounting standards in developing countries, especially when they do not correspond to the companies’ needs. Difficulties could occur when local standard-setters do not accurately know which new international standards are suitable to the market needs. The study gives some insights suggesting that corporate accounting practices should be analyzed to understand the real needs for new standards. Originality/value The paper highlights the beginning of a de facto convergence with international accounting standards without any support of national de jure convergence. Consideration of this phenomenon may contribute to the understanding of the malaise that characterizes the current accounting standard-setting in developing countries.

Accounting development in a changing environment: the case of Tunisia

2017 ◽  
Vol 59 (5) ◽  
pp. 756-775 ◽  
Author(s):  
Fatma Ben Slama ◽  
Mohamed Faker Klibi
Keyword(s):  
Developing Countries ◽  
Environmental Factors ◽  
Small Businesses ◽  
Accounting Standards ◽  
International Standards ◽  
International Accounting ◽  
Accounting System ◽  
International Accounting Standards ◽  
Public Interests ◽  
Content Type

Purpose The purpose of this paper is to discuss accounting development in Tunisia, which is a developing North African country little known in the international accounting literature. Design/methodology/approach Methodologically, this paper is based on an exploratory approach. It uses the descriptive tradition of research by collecting and analyzing numerical and narrative data to identify and describe environmental factors that favor or hamper accounting development in Tunisia. Findings This paper indicates that Tunisian companies have been applying the Enterprise Accounting System (EAS) since 1996. This system, while keeping with the logic of a chart of accounts, represents a first attempt to harmonize with international accounting standards. Accounting harmonization in Tunisia is meant to support the strategy, launched in the early 1990s, to integrate the country into the globalization process. Accordingly, the EAS has helped to achieve macroeconomic benefits (public interests). However, it does not lead to the desired level of financial transparency (private interests), especially that of large companies. Currently, Tunisian Accounting Standards neither reflect the rapid evolution of business activity nor changes in international accounting standards. This unachieved harmonization has led some listed companies to comply with some International Financial Reporting Standards which are not included in the EAS. Research limitations/implications The unachieved harmonization in Tunisia is mainly related to the political system, taxation factors, the legal system, the weak state of corporate governance and governmental control over standardization. Practical implications This paper provides insights into the problems of developing countries that harmonize with international standards to achieve public interests. These countries may encounter many difficulties in bringing their accounting standards up to date. These difficulties seem to be associated with environmental specificities. Accordingly, international standardization bodies and developing country regulators should take into account environmental factors which are determinant for the harmonization decision to succeed. Originality/value This paper contributes to the existing literature on accounting development in developing countries. It implies that recent accounting development, as it is designed in Tunisia, is better suited to the needs of small businesses. Large companies would be compelled to complement local generally accepted accounting principles by standards they choose, voluntarily, among international standards.

scholarly journals Understanding the Essence of the Accrual Method According to the International Standards

2021 ◽  
pp. 57-66
Author(s):  
Bidzina Grigalashvili ◽  
Keyword(s):  
Subject Matter ◽  
Accounting Standards ◽  
Financial Statements ◽  
International Standards ◽  
International Accounting ◽  
International Accounting Standards ◽  
Conceptual Frameworks ◽  
Accounting Practice ◽  
Accounting Policy

Assumption of international accounting standards was considerable event in the accounting practice of Georgia. One of the innovation was the introduction of "accounting policy" and establishment such an element in the compilation of financial statements as "accrual method". Mentioned method was not used in Soviet accounting. Based on his explanation, after the introduction of international standards, the definitions have undergone some changes. The article analyzes the implemented changes, definitions, given in international standards and conceptual frameworks, outlook of various authors concerning subject matter and relevant conclusions drawn. Based on researches have been proven that, the "accrual method" should be used by the enterprise in recognizing / reflecting income and expenses and not in relation to assets and liabilities. Based on the reconciliation and analysis of different definitions, the author's designation of the "accrual method" is proposed.

scholarly journals Understanding the Essence of the Accrual Method According to the International Standards

2021 ◽  
pp. 30-39
Author(s):  
Bidzina Grigalashvili ◽  
Keyword(s):  
Subject Matter ◽  
Accounting Standards ◽  
Financial Statements ◽  
International Standards ◽  
International Accounting ◽  
International Accounting Standards ◽  
Conceptual Frameworks ◽  
Accounting Practice ◽  
Accounting Policy

Assumption of international accounting standards was considerable event in the accounting practice of Georgia. One of the innovation was the introduction of "accounting policy" and establishment such an element in the compilation of financial statements as "accrual method". Mentioned method was not used in Soviet accounting. Based on his explanation, after the introduction of international standards, the definitions have undergone some changes. The article analyzes the implemented changes, definitions, given in international standards and conceptual frameworks, outlook of various authors concerning subject matter and relevant conclusions drawn. Based on researches have been proven that, the "accrual method" should be used by the enterprise in recognizing / reflecting income and expenses and not in relation to assets and liabilities. Based on the reconciliation and analysis of different definitions, the author's designation of the "accrual method" is proposed.

scholarly journals The impact of IFRS 7 on the significance of financial instruments disclosure

2016 ◽  
Vol 29 (3) ◽  
pp. 241-273 ◽  
Author(s):  
Yasean A. Tahat ◽  
Theresa Dunne ◽  
Suzanne Fifield ◽  
David M. Power
Keyword(s):  
Balance Sheet ◽  
Accounting Standards ◽  
Fair Value ◽  
Listed Companies ◽  
International Accounting ◽  
International Accounting Standards ◽  
Financial Instruments ◽  
Content Type ◽  
Ifrs 7 ◽  
The Impact

Purpose The main aim of this paper is to investigate Financial Instruments (FIs) disclosures provided by Jordanian listed companies under International Financial Reporting Standard No. 7 (IFRS 7) as compared to those supplied under International Accounting Standards (IAS) 30/32. Design/methodology/approach A sample of 82 Jordanian listed companies is used in this monograph. A disclosure index checklist was constructed to measure FI information provided by the sample companies. Findings The study finds that a larger number of Jordanian listed companies provided a greater level of FI-related information after IFRS 7 was implemented. Specifically, the sample firms provided 47 per cent of the disclosure index items after implementing IFRS 7 as compared to 30 per cent under IAS 30/32. In addition, the industrial analysis of FI disclosure revealed that the highest level of disclosure was provided by firms in the banking sector over the two periods; these companies disclosed 44 per cent of FI-related items pre-IFRS 7 and 69 per cent of items post-IFRS 7. Moreover, the industrial analysis of FI disclosure pre-and post-implementation of IFRS 7 revealed specific aspects of usefulness. In particular, some components of FI disclosure (Balance Sheet and Fair Value) showed no significant differences within and across sectors post the implementation of IFRS 7, suggesting that the new standard may have enhanced the comparability of such information. Research limitations/implications The results provide timely findings to Jordanian authorities who may be trying to evaluate the current reforms adopted; stringent enforcement mechanisms are needed to ensure full compliance with accounting standards. However, the present investigation was conducted on a single nation (Jordan); the circumstances in Jordan gave rise to the importance of the current study. A cross-country comparative analysis is needed in order to examine the application of IFRS 7 in a developing country context. Practical implications The results of the current study have a number of implications for policymakers. First, they provide a great deal of insight for the International Accounting Standards Board about the relevance of its standards to countries outside the Western context. In addition, the findings provide valuable insights for policymakers in Jordan who are concerned about the implications of mandatory disclosures. Originality/value The analysis of FI disclosure in developing countries in general, and in Jordan in particular has been overlooked by the extant literature and therefore this study is the first of its kind to examine this research issue for a sample of Jordanian firms.

scholarly journals The Conformity Level of Income Tax Accounting In Jordan with the Requirements of the International Accounting Standard IAS (12) in Terms of Taxable Temporary Differences’ Recognition

2017 ◽  
Vol 10 (5) ◽  
pp. 51
Author(s):  
Ahmad Adel Jamil Abdallah
Keyword(s):  
Income Tax ◽  
Accounting Standards ◽  
Financial Statements ◽  
International Standards ◽  
International Accounting ◽  
International Accounting Standards ◽  
Accounting Standard ◽  
Foreign Companies ◽  
International Accounting Standard ◽  
Tax Accounting

The present study aimed to measuring the conformity level of income tax accounting in Jordan with the requirements of ISA (12), and because of increasing to apply the international standards by local and foreign companies in Jordan and Jordanian legislations it’s appear gap between the accounting profit and the tax profit caused Taxable temporary and permanent differences. The study seeks to achieve set of goals represented by studying and analyzing the   compatibility level of income tax accounting by a questionnaire was distributed to 100 income and sales auditors working in the senior and moderate Taxpayers, directorates 85 questionnaires were retrieved and eighty were valid for the study’s purposes, the major results that is the study found the income tax accounting in Jordan does not adhere to the requirements of most of the international accounting standards as there were no presentation to the financial statements, and There was no recognition of Taxable temporary differences and deductible temporary differences (the differences between accounting profit and taxable profit) in the income tax accounting in Jordan.

scholarly journals Valuation of tangible fixed assets pursuant to the Czech accounting law and international accounting standards

2008 ◽  
Vol 53 (No. 10) ◽  
pp. 466-474
Author(s):  
P. Svoboda
Keyword(s):  
Accounting Standards ◽  
Financial Statements ◽  
Scientific Discipline ◽  
International Standards ◽  
International Accounting ◽  
International Accounting Standards ◽  
Tangible Assets ◽  
Fixed Assets ◽  
Value Determination ◽  
The Impact

The valuation of assets is a relatively challenging activity as well as a scientific discipline having an impact on the amount of the reported assets and economic result process. The report deals with the issue of valuation of the tangible fixed assets in the accounting entities compiling the financial statements pursuant to the Czech national legislation and in conformity with the requirements of the International Accounting Standards IAS/IFRS and US GAAP. The substantial differences in the definitions and valuation of the tangible fixed assets in these systems have been determined, indicating the impact on the economy of the accounting entity, both at the primary acquisition and as at the day of the closing of books. Attention has also been paid to the possibilities of recording the value decreases and to subsequent expenses. The analysis of legal regulations was completed with the analysis of the financial statements from selected economic entities. As per the international standards, the main difference consists in the possibility of component depreciation of tangible assets or, on the other hand, the possibility of group depreciation, in the differences in valuation in the event of acquisition paid for and of acquisition by one’s own production and in the possibility to consider the costs of disposal of assets. The subsequent expenses are also construed in a different manner: as per the Czech regulation, they are construed as repairs and maintenance. The substantial difference in comparison with the Czech regulation consists in the possibility of re-valuation of assets upwards as well as the method of actual value determination.

scholarly journals Creative Accounting – Some Aspects of Knowledge and Implementation in Albania

2018 ◽  
Vol 4 (1) ◽  
pp. 134-145
Author(s):  
Mirela Ujkani Miti ◽  
Elena Myftaraj ◽  
Brisejda Ramaj Zenuni
Keyword(s):  
Literature Review ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Statements ◽  
International Accounting ◽  
International Accounting Standards ◽  
National Accounting ◽  
Creative Accounting ◽  
Accounting Professionals ◽  
Main Factors

Abstract This paper comes as a result of exploring the creative accounting level of recognition and its use by accounting professionals during the preparation of the financial statements of the entities (SMEs) in Albania. In our country the financial reporting is based on national accounting standards which are in accordance with international accounting standards (IFRS for SME). So, based on the literature review, we will give some definitions of creative accounting as well as aspects of its use in different countries. Starting from those practices, we will identify the main factors why managers and accounting professionals exercise creative accounting. Through an analysis based on questionnaire’s data addressed to accounting professionals, we want to show if such practice is implemented in our country and how it is visualized by accounting professionals. In conclusion of this paper we will give some recommendations on the recognition and use of creative accounting by accountants in our country.

Do globalisation and adoption of IFRS by banks in Africa lead to less earnings management?

2019 ◽  
Vol 17 (2) ◽  
pp. 222-248 ◽  
Author(s):  
Mohammed Amidu ◽  
Haruna Issahaku
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Information Quality ◽  
Accounting Information ◽  
Financial Statements ◽  
International Standards ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Accounting Information Quality ◽  
National Economies

Purpose This paper aims to analyse the implications of globalisation and the adoption of international standards (International Financial Reporting Standards [IFRS]) for accounting information quality. Design/methodology/approach This paper uses a sample of 329 banks across 29 countries leading up to and beyond the implementation of IFRS to test for related hypotheses. Findings First, banks’ financial statements are prepared on the basis of international standards as national economies are integrated when social norms are diffused. Building on these results, the second test suggests that the relatively high-quality earnings among banks in Africa during the period is attributable to the adoption of and interaction of IFRS with globalisation and the strategy of banks to diversify within and across interest and non-interest income. Originality/value The authors investigate how globalisation and the adoption of IFRS affect accounting information quality.

Adoption of IFRS in Japan: challenges and consequences

2015 ◽  
Vol 27 (1) ◽  
pp. 3-27 ◽  
Author(s):  
Noriyuki Tsunogaya ◽  
Andreas Hellmann ◽  
Simone Domenico Scagnelli
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Accounting System ◽  
International Accounting Standards ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Institutional Complementarity ◽  
Accounting Environment ◽  
Social Organizational

Purpose – The purpose of this study is to provide a rigorous and holistic analysis of the main features of the Japanese accounting environment. It also raises issues related to the adoption of International Financial Reporting Standards (IFRS) in Japan. Design/methodology/approach – For the purpose of investigating the Japanese accounting system, this study applies the accounting ecology framework developed by Gernon and Wallace (1995) and provides a content analysis of relevant meetings of the Business Accounting Council of Japan. Findings – The findings of this study provide evidence that it would be problematic to require the adoption of IFRS for all listed companies in Japan. The main reason for this is that the Japanese policymakers and standard-setting bodies follow two objectives: enhancing the international comparability of financial reporting and maintaining institutional complementarity between financial reporting and other infrastructures such as accounting-related laws. Research limitations/implications – This study is relevant for accounting researchers and professionals with an interest in Japanese accounting practices. It is also useful for the International Accounting Standards Board and representatives of countries planning to adopt IFRS in the future. Originality/value – The findings of this study show that contextual issues such as social, organizational and professional environments cannot be ignored in the adoption of IFRS in Japan.

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