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Abstract

Details

More Accounting Changes
Type: Book
ISBN: 978-1-78635-629-1

Book part
Publication date: 23 December 2010

Ahmed Kholeif

Purpose – This article examines a detailed case study of the symbolic use of International Financial Reporting Standards (IFRSs) in an Egyptian state-owned company (AQF…

Abstract

Purpose – This article examines a detailed case study of the symbolic use of International Financial Reporting Standards (IFRSs) in an Egyptian state-owned company (AQF Co.) that is partially privatized by drawing on new institutional sociology (NIS) and its extensions. It explains how the ceremonial use of IFRSs is shaped by the interplay between institutionalized accounting practices, conflicting institutions, power relations, and the role of information technology (IT) in institutionalizing accounting rules and routines.

Methodology/approach – The research methodology is based on an intensive case study informed by NIS, especially the interplay between conflicting institutions, power relations, and IT role in institutionalizing accounting practice. Data were collected from multiple sources, including interviews, discussions, and documentary analysis.

Findings – The findings revealed that the company faced conflicting institutional demands from outside. The Central Agency for Accountability required the company to use the Uniform Accounting System (as a state-owned enterprise) and the Egyptian Capital Market Authority (CMA) required the company to use IFRSs (as a partially private sector company registered in the stock exchange). To meet these conflicting institutional demands, the company adopted loosely coupled accounting rules and routines and IT was used in institutionalizing existing Uniform Accounting System and preserving the status quo.

Research limitations – This study has limitations associated with its use of the case study method, including the inability to generalize from the findings of a single case study and the subjective interpretation by the researcher of the empirical data.

Practical implications – This article identifies that the interplay between institutional pressures, institutionalized accounting practices, intra-organizational power relations, and the role of IT in institutionalizing accounting routines contributed to the ceremonial use of IFRSs in an Egyptian state-owned enterprise. Understanding such relationships can help other organizations to become more aware of the factors affecting successful implementation and internalization of IFRSs and provide a better basis for planning the introduction of IFRSs into other organizations worldwide.

Originality/value of article – This article draws on recent research and thinking in sociology, especially the development and application of NIS. In addition, this article is concerned with the symbolic use of IFRSs in a transitional developing economy, Egypt, and hence contributes to debate about exporting Western accounting practices and other technologies to countries with different cultures and different stages of economic and political development.

Details

Research in Accounting in Emerging Economies
Type: Book
ISBN: 978-0-85724-452-9

Keywords

Article
Publication date: 28 June 2011

Sang Ho Kim and Dennis Taylor

This paper aims to investigate changes in corporate disclosures of labour‐related costs in financial statements arising from a change in the accounting regime from…

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Abstract

Purpose

This paper aims to investigate changes in corporate disclosures of labour‐related costs in financial statements arising from a change in the accounting regime from generally accepted accounting principles (GAAPs) to international financial reporting standards (IFRSs) in Australia.

Design/methodology/approach

An archival empirical approach is taken. Data are sampled for 160 listed companies in Australia over seven years covering Australian GAAPs (2003‐2005) and Australian IFRSs (2006‐2009) periods. To measure disclosures, a classification and count is made of line items for labour‐related costs found on the face of and in the notes to financial statements. These disclosures are analysed against firm‐specific characteristics and industry categories.

Findings

Results reveal companies disclosing “total labour costs” rose from about 60‐85 per cent, and the discretionary disaggregation of “total labour costs” became more prevalent. Companies providing disaggregated information in the post‐IFRSs period are characterized by lower total assets, lower sales and lower labour costs. Their return on equity and labour intensity are not found to be differentiating characteristics. Reasons for these phenomena are addressed.

Originality/value

Previous studies have not analysed the effect of IFRSs adoption on disclosures of labour‐related information. This study provides new evidence about the types of firms that have responded to IFRSs with new or enhanced labour‐related financial disclosures. It points to new opportunities for research and financial analysis from the enhanced availability of corporate‐level labour cost data.

Details

Journal of Human Resource Costing & Accounting, vol. 15 no. 2
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 31 May 2019

Juma Bananuka, Zainabu Tumwebaze, Doreen Musimenta and Patience Nuwagaba

The purpose of this paper is to report on the results of a study carried out to establish the contribution of board of directors’ effectiveness, intellectual capital (IC…

Abstract

Purpose

The purpose of this paper is to report on the results of a study carried out to establish the contribution of board of directors’ effectiveness, intellectual capital (IC) and managerial attitude to the adoption of International Financial Reporting Standards (IFRSs) in microfinance institutions (MFIs).

Design/methodology/approach

This study is cross-sectional and correlational. Data were collected through a questionnaire survey of 67 MFIs that are members of the Association of Microfinance Institutions of Uganda. The data were analyzed using statistical package for social sciences.

Findings

Both board of director’s effectiveness and IC positively and significantly contribute to the adoption of IFRSs. Managerial attitude is positively and significantly associated with the adoption of IFRSs, but its explanatory power is subsumed in IC.

Originality/value

To the authors’ knowledge, this is the first study to investigate the contribution of board of director’s effectiveness, IC and managerial attitude to the adoption of IFRSs in MFIs using evidence from a developing African country like Uganda.

Details

African Journal of Economic and Management Studies, vol. 10 no. 3
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 15 May 2009

Dennis W. Taylor

The objective of this study is to compare the costs to financial statement prepares of making the transition to International Financial Reporting Standards (IFRSs

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Abstract

Purpose

The objective of this study is to compare the costs to financial statement prepares of making the transition to International Financial Reporting Standards (IFRSs) relative to the benefits to financial statement users from receiving “higher quality” IFRS‐based information (measured as incremental value‐relevance for listed companies in the UK, Hong Kong and Singapore). These countries had different approaches to harmonization leading up to IFRS adoption.

Design/methodology/approach

This study is based on secondary data from financial statements and share market databases for a sample of 150 randomly selected listed companies in three countries for the year of first‐time adoption of IFRSs.

Findings

Results show that the extent and cost of adjustments to financial statements of UK companies at first‐time adoption of IFRSs is greater than companies in Hong Kong and, in turn, Singapore. But, in each of the three countries, financial statements prepared under IFRSs generate insignificant benefits to users in terms of providing incrementally more value‐relevant information than financial statements prepared under local generally accepted reporting practices. The self‐develop‐then‐harmonize strategy of the UK's Accounting Standards Board caused companies to incur higher costs‐to‐benefits on adoption of IFRSs than the selective‐importing‐of International Accounting Standards strategy in Hong Kong and Singapore.

Originality/value

The evidence enables a retrospective evaluation of historically different national standards setting strategies in terms of the cost‐benefit outcomes at time of adoption of IFRSs.

Details

Asian Review of Accounting, vol. 17 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 15 February 2016

Anthony Wall and Ciaran Connolly

Utilising concepts drawn from the governmentality literature, the purpose of this paper is to examine the adoption of International Financial Reporting Standards (IFRSs

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Abstract

Purpose

Utilising concepts drawn from the governmentality literature, the purpose of this paper is to examine the adoption of International Financial Reporting Standards (IFRSs) in the UK’s devolved administrations of Northern Ireland, Scotland and Wales in order to assess why they were adopted and how their introduction has been governed.

Design/methodology/approach

This research applies a combination of three different approaches, namely: a content analysis; an anonymous online questionnaire; and semi-structured interviews.

Findings

These include: the transition has had minimal impact upon policy setting and the information produced to aid budgeting and decision making; IFRSs are not entirely appropriate for the public sector; the time, cost and effort involved outweighed the benefits; public sector accounting has become overly-complicated; and the transition is not perceived as part of a wider privatisation programme.

Research limitations/implications

As this study focuses upon the three UK devolved administrations, the findings may not be applicable in a wider setting.

Practical/implications

Public sector change must be adequately resourced, carefully planned, with appropriate systems, trained staff and interdisciplinary project teams; accounting change should be based on value for money; and a single, coherent financial regime for the way in which government uses budgets, presents estimates to Parliament and publishes its resource accounts should be implemented.

Originality/value

This study highlights that accounting change is not just a technical issue and, while it can facilitate a more business-like environment and enhance accountability, all those affected by the changes may not have the requisite skills to fully utilise the (new) information available.

Details

Accounting, Auditing & Accountability Journal, vol. 29 no. 2
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 22 June 2012

George Emmanuel Iatridis

The purpose of this study is to investigate how the provision of voluntary International Financial Reporting Standard (IFRS) disclosures in the pre‐adoption period has…

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Abstract

Purpose

The purpose of this study is to investigate how the provision of voluntary International Financial Reporting Standard (IFRS) disclosures in the pre‐adoption period has affected the IFRS transition process of UK listed firms. The study also seeks to identify the motivation of firms with financing needs to provide voluntary IFRS disclosures and determines whether the provision of voluntary IFRS disclosures in the pre‐adoption period leads to more value relevant numbers.

Design/methodology/approach

The study utilises logistic and linear regressions to test the hypothetical relations set up in the study. The categorisation of firms into voluntary and non‐voluntary IFRS disclosers is based on the (non‐mandatory) provision of material IFRS information prior to adoption about the upcoming adoption of IFRSs in 2005. Company categorization is particularly based on the construction of an index similar to the disclosure index formulated by the Center for International Financial Analysis and Research.

Findings

With regard to IFRS transition, firms that provided voluntary IFRS disclosures prior to adoption display a greater positive change in equity and earnings. Non‐voluntary IFRS disclosers exhibit a greater positive change in leverage and a decrease in liquidity. Voluntary IFRS disclosers exhibit higher equity and debt financing needs and tend to be audited by a big auditor and be cross‐listed.

Research limitations/implications

The study implies that the need to obtain financing on better terms would motivate managers to provide voluntary (IFRS) disclosures to show that they are familiar with the upcoming regulatory change and ready to implement it when it becomes effective. The provision of voluntary IFRS disclosures leads to more value relevant accounting measures, suggesting that less information asymmetry would lead to the disclosure of informative and higher quality accounting information assisting investors in making informed judgements.

Originality/value

Knowing about different firms' transition experience would assist accounting standard setters in issuing explanatory IFRS guidance in order to lead to an efficient transition to IFRSs for countries that intend to adopt IFRSs or perform an accounting change. The examination of IFRS transition for firms that have experienced the change is important and would provide insight to firms considering this option. The findings further assist accounting academics and students, accountants and investors in their effort to study the motivation for providing voluntary disclosures as well as the magnitude and materiality of IFRS transition on companies' financial accounts.

Article
Publication date: 24 April 2007

Giuseppe A. Busacca and Paolo Maccarrone

The purpose of this paper is to show whether and how International Financial Reporting Standards (IFRSs) are able to improve the quality of financial accounting…

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Abstract

Purpose

The purpose of this paper is to show whether and how International Financial Reporting Standards (IFRSs) are able to improve the quality of financial accounting information concerning intangible assets.

Design/methodology/approach

Being part of a wider project investigating the ability of IFRSs to improve accounting information concerning intangibles, this paper analyses the application of some IFRSs' key innovations to Telecom Italia. Considered innovations include two of the most relevant areas of change between Italian accounting principles to IFRSs, i.e. business combinations and accounting for intangible assets with indefinite useful life. Quality of accounting information is measured through four key parameters: correctness, transparency, prudence, and timeliness. Representation provided by Italian accounting principles and US GAAP of selected accounting events are compared in terms of the four key parameters, and differences in accounting information quality are systematically observed.

Findings

The findings in this paper show that the use of value‐based measures in accounting actually leads to an improvement in the overall quality of information, by increasing correctness and transparency and leaving prudence and timeliness nearly unchanged. These early findings seem to support the conclusion that the path chosen by accounting evolution is correct, although some critical areas still exist.

Practical implications

The methodology proposed in this paper can represent a potential guideline for a wide range of researches concerning the quality of accounting information.

Originality/value

This paper provides three main contributions: a complete and structured critical review of literature on the evolution of accounting on intangible assets; an innovative framework to measure the quality of accounting information; a first in‐depth analysis of the key changes in accounting for intangibles induced by IFRSs on the balance‐sheets of Italian companies (through the case study).

Details

Journal of Intellectual Capital, vol. 8 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 28 June 2011

George Iatridis and Konstantia Dalla

While the Greek GAAP is stakeholder‐oriented and commonly viewed as a historical cost accounting model, IFRS is shareholder‐oriented and generally perceived as a…

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Abstract

Purpose

While the Greek GAAP is stakeholder‐oriented and commonly viewed as a historical cost accounting model, IFRS is shareholder‐oriented and generally perceived as a fair‐value accounting model. The study seeks to investigate the effects of adopting IFRSs on the financial statements of Greek listed companies. It focuses on major Greek industrial sectors and stock market indices and investigates the effects of IFRS adoption on company financial position and performance.

Design/methodology/approach

A binary logistic regression has been applied in order to capture the differences between the pre‐official adoption and official adoption periods. The model focuses on 2004 and 2005. The dependent variable is a dummy variable and takes the following values: 1 for 2005 and 0 for 2004.

Findings

The study shows that IFRS implementation has influenced positively the profitability of most industrial sectors as well as those firms that belong to FTSE 40 and SMALLCAP 80. IFRS adoption appears to negatively influence liquidity for a number of industrial sectors and stock market constituents. An increase in leverage is obtained from the examination of the sample stock market indices and industrial sectors. Similar findings are evidenced for firms of large size and high financing needs.

Research limitations/implications

The study is limited in the following respects. The results reflect short‐term timing differences, which may reverse in later accounting periods. Also, companies should have anticipated IFRS adoption and might have adjusted their accounting policies accordingly, or even managed their reported numbers, in the period under investigation, since the EU Regulation passed in 2002.

Originality/value

The findings of the study are useful for investors, shareholders, financial analysts and other market participants as they provide information about the impact of IFRS implementation per major sector and market index. The effects would be expected to vary as each sector and market index carries different financial attributes. Users of accounting information could make use of the findings of the study for the evaluation of the financial performance and prospects of a sector/index and for other investment decision‐making purposes. The study also contributes to the literature as it focuses on a code law country that is stakeholder‐oriented.

Details

International Journal of Managerial Finance, vol. 7 no. 3
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 1 October 2010

J. Rossouw

Although the intention of the International Accounting Standards Board (IASB) is not to permit choices in the accounting treatment of similar transactions and events…

Abstract

Although the intention of the International Accounting Standards Board (IASB) is not to permit choices in the accounting treatment of similar transactions and events, International Financial Reporting Standards (IFRSs) still contain various choices of accounting treatment. Different accounting alternatives for similar transactions limit the comparability of financial information. Certain accounting policies result in differences in recognition, measurement and disclosures. This article identifies 16 such accounting policy choices and presents the descriptive empirical results on which accounting policies were in fact chosen by a sample of 157 South African listed companies, in cases where IFRSs allow a choice between alternative accounting policies. Disclosure of accounting policies is necessary for the users of financial statements to enable them to compare the financial statements of various entities in making economic decisions. The research also found a lack of disclosures relating to chosen accounting policies in limited cases.

Details

Meditari Accountancy Research, vol. 18 no. 2
Type: Research Article
ISSN: 1022-2529

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