Exploratory evidence for the adoption of the IAS 7 in Turkey

Citation

(2011), "Exploratory evidence for the adoption of the IAS 7 in Turkey", International Journal of Accounting & Information Management, Vol. 19 No. 2. https://doi.org/10.1108/ijaim.2011.36619baa.024

Exploratory evidence for the adoption of the IAS 7 in Turkey

Article Type: Abstracts From: International Journal of Accounting and Information Management, Volume 19, Issue 2

This paper examines the adoption of the International Accounting Standard No. 7 (IAS 7) “cash flow statements (CFS)” of the International Accounting Standards Board (IASB) by the listed companies in the Istanbul Stock Exchange (ISE) in Turkey. The purpose of this study is to provide brief information about the history and background of the adoption or harmonization of the global financial reporting standards, to explore the degree of homogeneity in choosing among different options permitted by the IAS 7 and the degree of compliance with it. In order to achieve this purpose, an exploratory study was developed and conducted by analyzing financial statements of 17 non-financial firms of ISE top B30 from the year of 2007 to 2009. The findings of the study have shown a significant heterogeneity and non-compliance in applying the IAS 7 in Turkey. The high degree of heterogeneity may dismiss the comparability of financial statements across entities, requiring further efforts by the IASB to reduce options permitted in its standards. The high degree of non-compliance may create the risk of misleading financial information users who might have expected that the audited financial statements they have been prepared according to the IASB standards.

Keywords: Accounting harmonization, Adoption, Compliance, IAS 7, Cash flow statement

Recep Pekdemir and Nazlı Kepçe YönetIstanbul University, Istanbul, Turkey