Adoption of IFRS in Ecuador and Colombia 2010-2016

The International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), have been adopted by a large number of countries, since they are considered an international benchmark for obtaining comparable quality financial information. The adoption by Ecuador and Colombia of IFRS as a transition from their previous local regulations based on provisions and decrees, justifies the present research work to provide knowledge of the regulatory reality of both countries. Behind this ambitious adoption of accounting standards, since they are costly processes both financially and in terms of training, there is a need to obtain consistent financial information that should attract investments and facilitate access to other less harmful financial markets. The purpose of this research is to perform an analysis of the effect on the accounting variables of the balance sheet and financial ratios, before and after the application of IFRS on large Ecuadorian and Colombian companies. To do this, Wilcoxon’s nonparametric test of related samples is used, on a total of 204 Ecuadorian companies and 60 Colombian companies. To compare the results of both countries, a non-parametric U Mann-Whitney test is carried out. The results show an impact in both countries on the variables studied after the mandatory adoption of IFRS, although the relative impact is greater in the Colombian case.

Download Full-text

Accounting Concepts in Company Law

European Company and Financial Law Review ◽

10.1515/ecfr-2021-0019 ◽

2021 ◽

Vol 18 (3) ◽

pp. 398-427

Author(s):

Jesper Seehausen

Keyword(s):

Financial Reporting ◽

Accounting Standards ◽

Fair Value ◽

Company Law ◽

International Accounting Standards ◽

Reporting Standards ◽

Financial Reporting Standards ◽

Eu Legislation ◽

Starting Point ◽

Pros And Cons

Abstract Taking as a starting point Peter Hommelhoff’s argumentation that accounting law is, in many respects, linked to company law, the purpose of this article is to discuss one perspective of the links between accounting law and company law: accounting concepts in company law. After a brief outline of the existing EU legislation on accounting and a discussion on whether accounting law is part of company law, some examples of accounting concepts in company law – i. e. examples of accounting concepts that have been ‘implemented’ in company law – are discussed, drawing on the Consolidated Company Law Directive (CCLD) and the Shareholder Rights Directive (SRD 2) as well as the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS). These examples are related party transactions, consideration other than in cash and fair value, serious loss of the subscribed capital as well as a few other examples. It is also discussed whether accounting concepts in company law are a ‘good’ or a ‘bad’ thing. Balancing the pros and cons, in the author’s opinion, it is mostly positive that accounting concepts are used in company law in areas where this makes sense – and hence, in the author’s opinion, accounting concepts in company law are mainly a ‘good’ thing.

Download Full-text

Reliability of Financial Information from the Perspective of Benford’s Law

Entropy ◽

10.3390/e23050557 ◽

2021 ◽

Vol 23 (5) ◽

pp. 557

Author(s):

Ionel Jianu ◽

Iulia Jianu

Keyword(s):

Financial Reporting ◽

Capital Market ◽

Financial Statements ◽

Financial Information ◽

Benford’S Law ◽

Professional Judgment ◽

Reporting Standards ◽

Financial Reporting Standards ◽

Benford's Law ◽

Before And After

This study investigates the conformity to Benford’s Law of the information disclosed in financial statements. Using the first digit test of Benford’s Law, the study analyses the reliability of financial information provided by listed companies on an emerging capital market before and after the implementation of International Financial Reporting Standards (IFRS). The results of the study confirm the increase of reliability on the information disclosed in the financial statements after IFRS implementation. The study contributes to the existing literature by bringing new insights into the types of financial information that do not comply with Benford’s Law such as the amounts determined by estimates or by applying professional judgment.

Download Full-text

International Financial Reporting Standards and Orientation of Vietnam: “Roadmap & International Experience”

Accounting and Finance Research ◽

10.5430/afr.v7n4p167 ◽

2018 ◽

Vol 7 (4) ◽

pp. 167

Author(s):

Ha Thi Thuy Van ◽

Vu Thi Kim Anh ◽

Nguyen Dang Huy

Keyword(s):

Financial Reporting ◽

Accounting Standards ◽

Asia Pacific ◽

International Financial Reporting Standards ◽

International Accounting ◽

International Accounting Standards ◽

Reporting Standards ◽

Financial Reporting Standards ◽

Advantages And Disadvantages ◽

The World

Currently, the Ministry of Finance is implementing Decision 480/QD-TTG dated 03/18/2013 of The Prime Minister on approving the Strategy Accounting - Audit 2020, Vision 2030 and implementing the Resolution 35/NQ-CP of the Government dated 16.05.2016 related to the support and development of enterprises by 2020. Accordingly, the development and improvement the legal framework of Financial Reporting standards in Vietnam is one of the key tasks and urgent needs to be developed to meet the requirements of the economy in the period of integration. The system of International Accounting Standards, including the International Accounting Standards (IAS) and the standards of international financial reporting (IFRS) was issued, adjusted, updated and replaced by The International Accounting Standards Board. International Accounting Standards is an important condition to ensure that companies and organizations around the world can apply uniform accounting principles in the work of preparing and presenting financial statements. Currently, many countries around the world such as USA, Japan and European countries, Asia Pacific are approaching IFRS convergence trend. In the trend of globalization of accounting, Vietnam will not be outside the process of integration with the system of International Financial Reporting Standards. This article will review the process of formation and development of IFRS, the IFRS trends and the advantages and disadvantages of applying IFRS in Vietnam.

Download Full-text

Adoption of IFRS in Japan: challenges and consequences

Pacific Accounting Review ◽

10.1108/par-11-2012-0056 ◽

2015 ◽

Vol 27 (1) ◽

pp. 3-27 ◽

Cited By ~ 15

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.

Download Full-text

How Does Local Adoption of IFRS for Those Countries That Modified IFRS by Design, Impair Comparability with Countries That Have Not Adapted IFRS?

Journal of International Accounting Research ◽

10.2308/jiar-51807 ◽

2017 ◽

Vol 16 (3) ◽

pp. 59-90 ◽

Cited By ~ 2

Author(s):

Elizabeth Felski

Keyword(s):

Financial Reporting ◽

Accounting Standards ◽

Financial Statements ◽

Financial Statement ◽

International Accounting Standards ◽

Reporting Standards ◽

Financial Reporting Standards ◽

Study Results ◽

Reporting Environment ◽

Proper Translation

ABSTRACT Global adoption of International Financial Reporting Standards (IFRS) is thought to increase financial statement reliability and comparability. Although IFRS is required or allowed in over 130 nations, some countries modify IFRS as issued by the International Accounting Standards Board (IASB). This study is designed to closely examine each country that modifies IFRS in an effort to determine whether these modifications impair financial statement comparability. First is that countries lack the resources to implement the newest version of IFRS or ensure proper translation of the standards. Second is that countries make specific changes to allow IFRS to better meet the needs of their financial reporting environment. I categorize the first set of countries as default countries and the second set as design countries. The study results in several interesting and useful contributions. First, I develop a new typology for future IFRS research that includes not only the locally adopted category, but also the default and design categories. Second, the details of how countries modify IFRS make it clear that differences can exist in financial statements prepared in different countries both using IFRS. The users must be careful to understand how comparability may be impacted by these modifications.

Download Full-text

Accounting for leases – lessons from COVID-19

Pacific Accounting Review ◽

10.1108/par-09-2020-0186 ◽

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.

Download Full-text

IFRS Harmonization and Foreign Direct Investment

Advances in Business Strategy and Competitive Advantage - Analyzing the Relationship between Corporate Social Responsibility and Foreign Direct Investment ◽

10.4018/978-1-5225-0305-7.ch004 ◽

2016 ◽

pp. 31-48 ◽

Cited By ~ 1

Author(s):

Javier Vidal-García ◽

Marta Vidal

Keyword(s):

Foreign Direct Investment ◽

Financial Reporting ◽

Direct Investment ◽

Relevant Literature ◽

Accounting Standards ◽

Foreign Direct Investments ◽

International Accounting Standards ◽

Reporting Standards ◽

Financial Reporting Standards ◽

Cross Border

IFRS refers to International Financial Reporting Standards, which are the guidelines that provide the framework for accounting works. The principles are also known as the International Accounting Standards (IAS). This global financial concept was first introduced in 2001 to equip investors with analyzed accounting statements. In this Chapter we review the relation between IFRS and Foreign Direct Investments (FDIs). We review the relevant literature that analyses the effects on IFRS on FDIs and cross-border acquisitions. The economic literature states that the introduction of IFRS has presented an important increase in FDIs. The evidence shows that IFRS adopting countries attract investments from countries that implemented IFRS and non-IFRS implementing countries.

Download Full-text

IFRS Harmonization and Foreign Direct Investment

Foreign Direct Investments ◽

10.4018/978-1-7998-2448-0.ch018 ◽

2020 ◽

pp. 436-453

Author(s):

Javier Vidal-García ◽

Marta Vidal

Keyword(s):

Foreign Direct Investment ◽

Financial Reporting ◽

Direct Investment ◽

Relevant Literature ◽

Accounting Standards ◽

Foreign Direct Investments ◽

International Accounting Standards ◽

Reporting Standards ◽

Financial Reporting Standards ◽

Cross Border

Download Full-text

Using arguments and myths to lobby over controversial accounting issues: evidence from Japan

Pacific Accounting Review ◽

10.1108/par-01-2019-0003 ◽

2020 ◽

Vol 32 (3) ◽

pp. 355-390

Author(s):

Noriyuki Tsunogaya ◽

Andreas Hellmann

Keyword(s):

Financial Reporting ◽

Financial Services ◽

Accounting Standards ◽

Fair Value ◽

Network Effect ◽

International Accounting Standards ◽

Content Type ◽

Generally Accepted Accounting Principles ◽

Financial Reporting Standards ◽

Stakeholder Groups

Purpose This study aims to examine the (overt) arguments and (covert) myths the Business Accounting Council (BAC) members have used to lobby over controversial accounting issues, such as the application of fair value accounting (FVA) and the adoption of International Financial Reporting Standards (IFRS) in Japan. Design/methodology/approach The authors used a content analysis to examine 85 statements included in multiperiod BAC meeting minutes and 68 articles prepared by International Accounting Standards Board (IASB) representatives from Japan. Findings The results reveal that together with the arguments, myths were created and amplified by opponents of FVA and the Financial Services Agency to hide the latter’s strong regulatory power. They created these myths, using covert stories of the importance of manufacturing activities and tax accounting (for small- and medium-sized enterprises [SMEs]), to oppose mandatory IFRS adoption in Japan and, thus, to maintain vested rights in preparing the Japanese generally accepted accounting principles and Japanese accounting standards for SMEs. Originality/value First, this study contributes to the lobbying literature by focusing on the coalition (network) effect of influential stakeholder groups. Second, although lobbying activities have been investigated mostly using comment letters, this study reviews multiperiod BAC meeting minutes and articles prepared by IASB representatives from Japan. Third, the study examines both overt arguments and covert myths, both of which are important in unmasking the fundamental structures of power within influential organizations, such as government agencies and standard-setters.

Download Full-text

An investigation of the level of compliance with international accounting standards (IAS 1) by listed firms in Bahrain Bourse

International Journal of Islamic and Middle Eastern Finance and Management ◽

10.1108/imefm-07-2015-0077 ◽

2016 ◽

Vol 9 (2) ◽

pp. 254-276 ◽

Cited By ~ 7

Author(s):

Fatema Ebrahim Alrawahi ◽

Adel Mohammed Sarea

Keyword(s):

Financial Reporting ◽

Accounting Standards ◽

Annual Reports ◽

International Accounting ◽

International Accounting Standards ◽

Content Type ◽

Listed Firms ◽

Financial Reporting Standards ◽

Industry Type ◽

Regulatory Bodies

Purpose This study aims to investigate the association between seven firm-specific characteristics and the level of mandatory compliance with International Accounting Standards (IAS) 1 by firms listed on Bahrain Bourse. Design/methodology/approach A disclosure index is used to measure the extent of compliance with IAS 1. Each of the 36 sampled firms’ annual reports were examined against the index for the financial year ending December 31, 2013. Findings The results reveal an overall compliance of 83 per cent. Regression results report that only audit firm size, profitability and industry type have a positive and significant association with IAS 1 disclosure requirements. Practical implications This study should be particularly relevant to regulatory bodies in Bahrain for strategizing and encouraging compliance with IAS 1 by listed firms. Originality/value Additionally, the study contributes to financial reporting literature relating to the Gulf Cooperation Council countries, mainly Bahrain. Bahrain is a financial hub, and it is interesting to examine how it presents its financial statements to investors and the degree of its compliance with International Financial Reporting Standards since its adoption in 2007.

Download Full-text