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Global accounting standards: reality and ambitions

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  • 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
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    References listed on IDEAS

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    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.
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    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. Zhang, Ying & Andrew, Jane, 2014. "Financialisation and the Conceptual Framework," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 17-26.
    3. 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.
    4. 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.
    5. 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.
    6. John Christensen, 2010. "Conceptual frameworks of accounting from an information perspective," Accounting and Business Research, Taylor & Francis Journals, vol. 40(3), pages 287-299.

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