IDEAS home Printed from https://ideas.repec.org/a/eme/arjpps/v22y2009i1p68-80.html
   My bibliography  Save this article

Global accounting standards: reality and ambitions

Author

Listed:
  • Alfred Wagenhofer

Abstract

Purpose - The enormous success of International Financial Reporting Standards (IFRS) in becoming globally accepted accounting standards leads to challenges in the future. The purpose of this paper is to outline challenges that arise from political influences and from the pressure to sustain a successful path in the development of standards. It considers two strategies for future growth which the International Accounting Standards Board (IASB) follows: the work on fundamental issues and diversification to private entities. Design/methodology/approach - The development of IFRS is discussed and evaluated against insights gained from accounting theory. In particular, results from information economics illustrate potential difficulties of the development of a new conceptual framework for international accounting standards. Findings - The main findings are: the growth strategies adopted by the IASB are risky; the conceptual framework does not sufficiently take into account the diverse objectives of financial reporting; stewardship, prudence, and aggregation can be desirable characteristics of accounting information; and standards that are developed for listed companies need not be well suited for private entities. Practical implications - The paper suggests that skepticism is warranted about the viability of a consistent framework that applies globally, and that there are benefits to constrained competition among different standards. Originality/value - The paper reviews academic research that has implications for standard setting and identifies key issues in developing global accounting standards.

Suggested Citation

  • Alfred Wagenhofer, 2009. "Global accounting standards: reality and ambitions," Accounting Research Journal, Emerald Group Publishing Limited, vol. 22(1), pages 68-80, July.
    • Handle: RePEc:eme:arjpps:v:22:y:2009:i:1:p:68-80
    DOI: 10.1108/10309610910975333
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/10309610910975333/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/10309610910975333/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/10309610910975333?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Feltham, Gerald & Indjejikian, Raffi & Nanda, Dhananjay, 2006. "Dynamic incentives and dual-purpose accounting," Journal of Accounting and Economics, Elsevier, vol. 42(3), pages 417-437, December.
    2. Lambert, Richard A., 2001. "Contracting theory and accounting," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 3-87, December.
    3. Qi Chen & Thomas Hemmer & Yun Zhang, 2007. "On the Relation between Conservatism in Accounting Standards and Incentives for Earnings Management," Journal of Accounting Research, Wiley Blackwell, vol. 45(3), pages 541-565, June.
    4. Benston, George J. & Bromwich, Michael & Litan, Robert E. & Wagenhofer, Alfred, 2006. "Worldwide Financial Reporting: The Development and Future of Accounting Standards," OUP Catalogue, Oxford University Press, number 9780195305838.
    5. Holger Daske & Luzi Hail & Christian Leuz & Rodrigo Verdi, 2008. "Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences," Journal of Accounting Research, Wiley Blackwell, vol. 46(5), pages 1085-1142, December.
    6. Ball, Ray & Robin, Ashok & Wu, Joanna Shuang, 2003. "Incentives versus standards: properties of accounting income in four East Asian countries," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 235-270, December.
    7. Sunil Dutta & Xiao‐jun Zhang, 2002. "Revenue Recognition in a Multiperiod Agency Setting," Journal of Accounting Research, Wiley Blackwell, vol. 40(1), pages 67-83, March.
    8. Christensen, Peter O. & Feltham, Gerald A. & Sabac, Florin, 2003. "Dynamic incentives and responsibility accounting: a comment," Journal of Accounting and Economics, Elsevier, vol. 35(3), pages 423-436, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karen Benson & Peter M Clarkson & Tom Smith & Irene Tutticci, 2015. "A review of accounting research in the Asia Pacific region," Australian Journal of Management, Australian School of Business, vol. 40(1), pages 36-88, February.
    2. Jarva, Henry & Kallunki, Juha-Pekka & Livne, Gilad, 2019. "Earnings performance measures and CEO turnover: Street versus GAAP earnings," Journal of Corporate Finance, Elsevier, vol. 56(C), pages 249-266.
    3. John Christensen, 2010. "Conceptual frameworks of accounting from an information perspective," Accounting and Business Research, Taylor & Francis Journals, vol. 40(3), pages 287-299.
    4. Zhang, Ying & Andrew, Jane, 2014. "Financialisation and the Conceptual Framework," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 17-26.
    5. Carien van Mourik & Yuko Katsuo Asami, 2018. "Articulation, Profit or Loss and OCI in the IASB Conceptual Framework: Different Shades of Clean (or Dirty) Surplus," Accounting in Europe, Taylor & Francis Journals, vol. 15(2), pages 167-192, May.
    6. Christoph Kuhner & Christoph Pelger, 2015. "On the Relationship of Stewardship and Valuation—An Analytical Viewpoint," Abacus, Accounting Foundation, University of Sydney, vol. 51(3), pages 379-411, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sabac, Florin, 2008. "Dynamic incentives and retirement," Journal of Accounting and Economics, Elsevier, vol. 46(1), pages 172-200, September.
    2. Voulgaris, Georgios & Stathopoulos, Konstantinos & Walker, Martin, 2014. "IFRS and the Use of Accounting-Based Performance Measures in Executive Pay," The International Journal of Accounting, Elsevier, vol. 49(4), pages 479-514.
    3. Xi Li, 2015. "Accounting Conservatism and the Cost of Capital: An International Analysis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 42(5-6), pages 555-582, June.
    4. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    5. Neslihan Ozkan & Zvi Singer & Haifeng You, 2012. "Mandatory IFRS Adoption and the Contractual Usefulness of Accounting Information in Executive Compensation," Journal of Accounting Research, Wiley Blackwell, vol. 50(4), pages 1077-1107, September.
    6. Rahimah Mohamed Yunos Author_Email: rahim221@johor.uitm.edu.my & Malcolm Smith & Zubaidah Ismail & Syahrul Ahmar Ahmad, 2011. "Inside Concentrated Owners, Board Of Directors And Accounting Conservatism," Annual Summit on Business and Entrepreneurial Studies (ASBES 2011) Proceeding 2011-053-178, Conference Master Resources.
    7. Francesco De Luca & Jenice Prather-Kinsey, 2018. "Legitimacy theory may explain the failure of global adoption of IFRS: the case of Europe and the U.S," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(3), pages 501-534, September.
    8. Keryn Chalmers & Greg Clinch & Jayne M Godfrey, 2011. "Changes in value relevance of accounting information upon IFRS adoption: Evidence from Australia," Australian Journal of Management, Australian School of Business, vol. 36(2), pages 151-173, August.
    9. Dobler, Michael, 2008. "Incentives for risk reporting -- A discretionary disclosure and cheap talk approach," The International Journal of Accounting, Elsevier, vol. 43(2), pages 184-206.
    10. Irene Karamanou & George P. Nishiotis, 2009. "Disclosure and the Cost of Capital: Evidence from the Market's Reaction to Firm Voluntary Adoption of IAS," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(7‐8), pages 793-821, September.
    11. repec:hum:wpaper:sfb649dp2008-028 is not listed on IDEAS
    12. Ugur Ergun & Elif ?zt¨¹rk, 2013. "Perceptions of Small and Medium Enterprises on IFRS Adaptation Process: a Case Study in Federation of Bosnia and Herzegovina," Journal of Business Administration Research, Journal of Business Administration Research, Sciedu Press, vol. 2(1), pages 43-48, April.
    13. Cairns, David & Massoudi, Dianne & Taplin, Ross & Tarca, Ann, 2011. "IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia," The British Accounting Review, Elsevier, vol. 43(1), pages 1-21.
    14. Raith, Michael, 2012. "Optimal incentives and the time dimension of performance measurement," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2158-2189.
    15. Persakis, Anthony & Iatridis, George Emmanuel, 2015. "Earnings quality under financial crisis: A global empirical investigation," Journal of Multinational Financial Management, Elsevier, vol. 30(C), pages 1-35.
    16. Macías, Marta & Muiño, Flora, 2011. "Examining dual accounting systems in Europe," The International Journal of Accounting, Elsevier, vol. 46(1), pages 51-78, March.
    17. Edith Leung & Arnt Verriest, 2015. "The Impact of IFRS 8 on Geographical Segment Information," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 42(3-4), pages 273-309, April.
    18. Gatluak Gach Chuol Thony & Anthony Duku Peter, 2023. "The Impact of Adoption of International Financial Reporting Standard on Quality of Accounting Information in South Sudan: A Case Study of Kenya Commercial Bank and Cooperative Bank," International Journal of Science and Business, IJSAB International, vol. 19(1), pages 28-48.
    19. Castro, F. Henrique & Santana, Verônica, 2018. "Informativeness of stock prices after IFRS adoption in Brazil," Journal of Multinational Financial Management, Elsevier, vol. 47, pages 46-59.
    20. Marra, Antonio & Mazzola, Pietro & Prencipe, Annalisa, 2011. "Board Monitoring and Earnings Management Pre- and Post-IFRS," The International Journal of Accounting, Elsevier, vol. 46(2), pages 205-230, June.
    21. Meshram, Vedprakash Vasantrao & Arora, Jagriti, 2021. "Accounting constructs and economic consequences of IFRS adoption in India," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 45(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:arjpps:v:22:y:2009:i:1:p:68-80. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.