Barriers to institutionalization of an IFRS-based model: perceptions of Portuguese auditors

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alexandra Soares Fontes ◽  
Lúcia Lima Rodrigues ◽  
Carla Marques ◽  
Ana Paula Silva
Keyword(s):  
Financial Reporting ◽  
National Level ◽  
Local Context ◽  
Institutional Research ◽  
Accounting Systems ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Accounting Model ◽  
Barriers To Implementation ◽  
High Level

Purpose In 2010, Portugal’s newly implemented Accounting Standardization System (SNC - Sistema de Normalização Contabilística) aligned Portuguese accounting standards for unlisted companies with International Financial Reporting Standards (IFRS). The purpose of this paper is to explore the influence of the local context and the role of auditors in the institutionalization of this IFRS-based model in Portugal. Design/methodology/approach Drawing from an institutional theory framework, the authors interviewed 16 Portuguese auditors in 2017 (seven years after formal implementation of the SNC) to determine their perceptions on whether barriers to the IFRS-based model persisted. Findings The authors reveal that the code-law institutional logic embedded in the Portuguese context is hindering full institutionalization of the new accounting model. Some persisting barriers to implementation reflected a decoupling between formal requirements and actual practices. Despite these barriers, there has been an encouraging institutionalization of SNC. The authors reveal a high level of commitment of auditors. They draw attention to the engagement of auditors in the institutional work that is intended to assist in SNC implementation, and their role as promoters of a power-knowledge discourse in propagating IFRS institutional logics at the national level, namely, through the justification and rationalization of the reported institutional contradictions. Practical implications The highlighting the authors provide of problems related to accounting change should assist international regulators, the Portuguese standard-setter and professional accounting associations to devise appropriate strategies to promote IFRS-based accounting systems implementation. Originality/value The authors contribute to the skimpy literature on micro institutional analysis and encourage further exploration of the dynamics between the micro and macro levels of analysis in institutional research.

The level of compliance with International Financial Reporting Standards (IFRS 7)

2015 ◽  
Vol 11 (3) ◽  
pp. 231-244 ◽  
Author(s):  
Adel Mohammed Sarea ◽  
Zahra Abdulla Al Dalal
Keyword(s):  
Financial Reporting ◽  
Research Question ◽  
Financial Sector ◽  
Listed Companies ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Ifrs 7 ◽  
High Level

Purpose – The purpose of this paper is to examine the level of compliance with International Financial Reporting Standards (IFRS 7) by listed companies in Bahrain Bourse (BB). Design/methodology/approach – First, the authors design disclosure compliance checklist of ten requirements of IFRS 7. Second, a score of 3 is assigned if high level of compliance, 2 is assigned if medium level of compliance, 1 is assigned if low level of compliance. The sample of the study comprises of (21) companies listed in BB for year 2013. Findings – The main findings are, the level of compliance varied by industry and the highest level of compliance reported for the investment sector whereas the lowest for the insurance industry. This result indicates that all listed companies are complying with IFRS 7 in terms of the standard disclosure requirements. Practical implications – In this paper attempt has been made to support the argument of previous studies. The paper attempts to test and answer the research question; does the financial sector in Bahrain comply with IFRS 7? These results could lead to high level of awareness about the financial instruments. Adoption of the IFRS 7 could lead to high level of compliance and play a significant role in attracting global investors’ interest to the local markets, especially in a developing country like Bahrain. Originality/value – This paper provides an insight from the reality of the financial market in Bahrain as a result of answering this question; does the financial sector in Bahrain comply with IFRS 7?

Revenue-expense versus asset-liability model

2020 ◽  
Vol 28 (2) ◽  
pp. 277-310
Author(s):  
Nicola Moscariello ◽  
Fabio La Rosa ◽  
Francesca Bernini ◽  
Pietro Fera
Keyword(s):  
Financial Reporting ◽  
Private Firms ◽  
Earnings Persistence ◽  
Content Type ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Earnings Attributes ◽  
Country Analysis ◽  
Accounting Model ◽  
The Impact

Purpose The purpose of this study is to analyse the impact of two different financial reporting models (revenue-expense vs asset-liability) on several earnings attributes. Design/methodology/approach The analysis compares the earnings attributes of non-financial private firms using the Italian generally accepted accounting principles (Italian GAAP, based on a revenue-expense model) with those of the Italian non-financial private firms voluntarily adopting the international financial reporting standards (IFRS, based on the asset-liability model). To address major methodological concerns, the research design is based on a single-country analysis and on three different samples as follows: firms voluntarily adopting IFRS; a matched sample of Italian GAAP firms; Italian GAAP firms belonging to the Elite programme, and therefore, comparable to the IFRS adopters in terms of incentives towards financial reporting transparency. Findings The results show that firms reporting under a revenue-expense model are characterized by a stronger revenue-expense matching degree, along with higher earnings’ persistence, earnings’ predictability and conditional conservatism than firms adopting an asset-liability model. In addition, contrary to the expectations, Italian GAAP firms do not present smoother earnings and do not report greater abnormal accruals than IFRS adopters do. Overall, the findings suggest that the switch from a revenue-expense model to an asset-liability model negatively affects several earnings attributes of non-financial private companies, shedding new light on the drawbacks associated with the adoption of the IFRS accounting model. Originality/value This study addresses a theme characterized by sparse research efforts, adding new insights to the debate on the decline in the quality of earnings and on the drawbacks associated with the adoption of the IFRS accounting model.

scholarly journals Is the accounting quality after the mandatory adoption of IFRS a random walk? Evidence from Europe

2018 ◽  
Vol 19 (3) ◽  
pp. 334-350 ◽  
Author(s):  
Ana Isabel Morais ◽  
Ana Fialho ◽  
Andreia Dionísio
Keyword(s):  
Empirical Evidence ◽  
Financial Reporting ◽  
Value Relevance ◽  
Accounting Quality ◽  
Accounting Systems ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Mandatory Adoption ◽  
Specific Factors

Purpose The purpose of this paper is to provide empirical evidence regarding the classification of European countries based on accounting quality metrics. The authors investigate whether the grouping of countries based on accounting quality levels differs from other classifications based on accounting practices or country-specific factors identified in previous studies. Design/methodology/approach The authors run panel data regressions for 2.078 European listed companies using value relevance and earnings smoothing metrics. The authors also apply cluster analysis to classify the countries. Findings The results suggest that the adoption of a common set of International Financial Reporting Standards (IFRS) did not lead to a similar level of accounting quality of financial information. The authors identified three clusters of countries that are not coincident with previous classifications. Research limitations/implications The results show that the adoption of different accounting practices allowed in IFRS does not necessarily influence accounting quality. Practical implications The results suggest that the way regulators decided to incorporate IFRS into national accounting systems is one issue that may be relevant in explaining the three clusters. Originality/value The paper provides empirical evidence that supports two theoretical assertions. The first is that a classification depends entirely on the characteristics used to represent the countries being classified. The second is that the adoption of a single set of accounting standards does not determine similar accounting practices and does not lead to similar levels of accounting quality.

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.

A Cross-Country Empirical Investigation of Corruption and its Relationship to Economic, Cultural, and Monitoring Institutions: An Examination of the Role of Accounting and Financial Statements Quality

2002 ◽  
Vol 17 (4) ◽  
pp. 325-350 ◽  
Author(s):  
Marinilka Barros Kimbro
Keyword(s):  
Financial Reporting ◽  
Empirical Investigation ◽  
Financial Statements ◽  
Financial Accounting ◽  
Accounting Systems ◽  
Financial Reporting Standards ◽  
Information Monitoring ◽  
Per Capita ◽  
Cross Country

This paper empirically tests a model that links economic, cultural, and information/monitoring variables to corruption in 61 countries. The results offer significant evidence to suggest that higher GNP per capita, moderate economic growth, effective legal and financial accounting systems, collectivist values and low power distance are associated with countries that have low corruption. Countries that have better laws, more effective judiciary, good financial reporting standards, and a higher concentration of accountants are found to be less corrupt.

Research productivity of International Financial Reporting Standards (IFRS) from 2003 to 2020

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bashir Tijjani ◽  
Shafiq Ur Rehman ◽  
Zachariah Peter ◽  
Ishtiaq Ahmad Bajwa ◽  
Muhammad Ajmal Khan
Keyword(s):  
Bibliometric Analysis ◽  
Financial Reporting ◽  
Research Productivity ◽  
Accounting Standards ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Publication Patterns ◽  
Scopus Database

Purpose This study aims to examine the quantitative research productivity of International Financial Reporting Standards (IFRS) globally by using the bibliometric approach. The method was applied to articles indexed in the Scopus database to analyze the publication patterns, trends and research productivity of the selected papers. Design/methodology/approach Bibliometric analysis is applied to analyze research productivity of IFRS from 2003 to 2020. The method was applied to articles indexed in the Scopus database to analyze the publication patterns and research productivity of the selected papers. Findings This study finds that a good number of articles have been published on IFRS, the top five countries are the USA, UK, Australia, Germany and Canada. This clearly shows that developed markets have the highest number of publications on IFRS. This could be as a result of the early adoption of IFRS by those economies and owing to the interest of researchers in those markets. Most of the studies are quantitative in nature; this study indicates that publication on accounting standards is popular as the number of citations is significant; most of the articles have two or more authors and were published in top-ranking journals. Practical implications This study provides up-to-date literature on the global research productivity of IFRS; as a result, it supports the development of policies by the users of this accounting standards. The findings of this study also serve as a reference point for firms and regulators around the world. Given the thoroughness of the methodology of this study, the results make it easier to effectively identify the direction of research on the implementation of IFRS in organizations. Originality/value This study provides a more comprehensive bibliometric analysis on the growth of IFRS literature (2003–2020) in the Scopus database; most of the prior studies have covered relatively few areas of focus as well as a fewer number of high impact factor journals. The relevance of this finding is in uncovering different areas of IFRS research productivity globally.

Accounting for leases – lessons from COVID-19

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alan Teixeira
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Financial Accounting Standards Board ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Setting Process

Purpose The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) have given relief to lessees in response to the coronavirus (COVID-19) pandemic. However, it is not clear why any relief from the requirements in International Financial Reporting Standards (IFRS) or the Accounting Standards Codification (ASC) should be necessary. The purpose of this paper is to highlight weaknesses in how the IASB and FASB developed their leases Standards, and why those Standards are not robust enough to cope with a shock to the economic system. Design/methodology/approach The COVID-19 relief suspends some features of the leasing requirements rather than changing them. What if other economic or regulatory events cause the same circumstances to arise? Findings Have COVID-19 exposed weaknesses in the leasing standards that should have been avoided when they were developed or is COVID-19 the problem? Originality/value Analysis of actual board discussions and staff papers is unusual and provides insights into the standard-setting process.

The IPSASB's recent strategies: opportunities for academics and standard-setters

2020 ◽  
Vol 32 (3) ◽  
pp. 315-319 ◽  
Author(s):  
Gwenda Jensen
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Fitness For Purpose ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Public Sector Accounting ◽  
Ongoing Dialogue ◽  
Practical Implications

PurposeThe purpose of this article is to contribute to an ongoing dialogue between practitioners and academics. This article describes the International Public Sector Accounting Standards Board (IPSASB) recent strategies and highlights the IPSASB's increasing outreach to academics.Design/methodology/approachThis is a practitioner's viewpoint which reflects the IPSASB's publicly available documents, and the opinions of a practitioner directly involved in the IPSASB's work and International Public Sector Accounting Standards (IPSAS) development.FindingsThe findings are that the IPSASB has increased its outreach to academics and now academics have more opportunities to engage with the IPSASB and IPSAS developments. The IPSASB's strategy has remained relatively constant over time, focusing on IPSAS to address public sector-specific issues, alignment with the International Financial Reporting Standards (IFRS) and reduction of differences between IPSAS and Government Finance Statistics (GFS) reporting guidelines.Research limitations/implicationsThe limitations of this article (which are also its strength in terms of fitness for purpose) are that as a practitioner's viewpoint it provides a brief overview and personal judgments, rather than an empirical analysis of developments applying a theoretical framework.Practical implicationsThe practical implications were IPSASB's increased outreach to the research community providing opportunities for academics to have increased input into IPSAS development, with likely benefits to researchers and the IPSASB.Social implicationsPractitioners’ engagement with academics supports increased understanding of the respective views leading to better outcomes for practitioners and academics working in the area of public sector financial reporting and its regulation.Originality/valueThis article is the first to (a) describe the IPSASB's increasing outreach to academics during 2019–2020 and (b) compare the IPSASB's strategies for the period of 2019–2023, with its strategies since the beginning of IPSAS developments in 1996–1997.

Credit relevance after mandatory IFRS adoption in deposit money banks of Nigeria

2020 ◽  
Vol 5 (1) ◽  
pp. 47-61
Author(s):  
Dagwom Yohanna Dang ◽  
James Ayuba Akwe ◽  
Salisu Balago Garba
Keyword(s):  
Financial Reporting ◽  
Credit Rating ◽  
Financial Reports ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Secondary Sources ◽  
Ifrs Adoption ◽  
Regulatory Authorities ◽  
Significant Difference

PurposeCredit relevance of financial reporting can be influenced by change in financial reporting framework. This study aims to examine the effect of mandatory international financial reporting standards (IFRS) adoption on credit relevance quality of financial reporting of deposit money banks (DMBs) in Nigeria.Design/methodology/approachThis study uses difference-in-differences (D-in-D) design for its modelling. Panel data regression analysis based on the D-in-D model is used in analysing the data collected from secondary sources.FindingsThe findings of this study are that based on the D-in-D approach, there is a significant and positive effect of mandatory IFRS adoption on credit relevance quality of financial reporting of DMBs in Nigeria, and that there is also a significant difference in the credit relevance quality of financial reporting of mandatory adopting banks in the post-mandatory IFRS adoption period compared to pre-mandatory IFRS adoption period.Research limitations/implicationsTo the best of this study's review, there is inadequacy of literature within the credit relevance research in Nigeria. In the light of this, this study intends to fill the gap.Practical implicationsThis study is specifically important to regulatory authorities, both primary and secondary regulators. Specifically, this study has implications in the regulatory roles of Central Bank of Nigeria (CBN) and Financial Reporting Council of Nigeria (FRC). However, the study recommends that regulatory authorities should encourage DMBs to avail their financial reports annually to credit rating agencies (local and international) for proper evaluation for subsequent ratings.Originality/valueThe peculiarities in this study, that is the utilisation of the D-in-D design and the use of credit relevance metric as the dependent variable, made this study important and novel to push the frontier of existing knowledge.

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