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Ranking of handicaps in international financial analysing

Esther Ortiz (Lecturer in Accounting and Finance, Faculty of Economics and Business, University of Murcia, Murcia, Spain)
Isabel Martínez (Lecturer in Accounting and Finance, Faculty of Economics and Business, University of Murcia, Murcia, Spain)
Jose G. Clavel (Lecturer in Quantitative Methods for the Economy, Faculty of Economics and Business, University of Murcia, Murcia, Spain)

European Business Review

ISSN: 0955-534X

Article publication date: 1 June 2003

1412

Abstract

The objective of this study is to rank some factors as handicaps that create diversity and incertitude in international financial analysis. It is an important subject when discussing the adoption of International Accounting Standards as one unique set of standards in capital markets around the world. Although it is necessary to reach homogeneity in the field of accounting standards because of the costs, barriers and lack of comparability that they create, the handicap imposed by accounting diversity is not the most important. This assertion has been proved through statistical methodology: Dual Scaling. The most important factors creating differences between net income and shareholders’ funds prepared according to domestic (Spanish, German, and British) and US‐GAAPS are the industry in which the company operates, the country from where the company comes and finally differences due to different accounting standards used in the calculation of net income and shareholders’ funds.

Keywords

Citation

Ortiz, E., Martínez, I. and Clavel, J.G. (2003), "Ranking of handicaps in international financial analysing", European Business Review, Vol. 15 No. 3, pp. 170-180. https://doi.org/10.1108/09555340310474677

Publisher

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MCB UP Ltd

Copyright © 2003, MCB UP Limited

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