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Understanding the Consequences of Accounting Standards in Europe: The Role of EFRAG

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  • Mario Abela
  • Araceli Mora

Abstract

The global financial crisis has accelerated the need for standard-setters to demonstrate that they understand the effects of the accounting standards they are setting. Within a European context, the endorsement process and the ultimate adoption of new and amended International Financial Reporting Standards into European Union law demand that there is evidence to support the assertion that such standards will improve financial reporting. Our analysis is anchored in the ideology theory of regulation which provides a compelling case for effect analysis to underpin the standard-setting process. For that process to work effectively, a number of key actors need to engage in the process. Accordingly, the aim of this paper is to analyse the potential role of those actors in the standard-setter's analysis of effects. It is argued that there is a significant role for academic research to play in that process and that intermediaries, such as European Financial Reporting Advisory Group, can serve to bring research to the attention of the standard-setter. However, addressing the current disconnect between standard-setters and accounting researchers is not straightforward and we propose various strategies for how that relationship could be improved. We argue that these changes may lead to an improvement in the efficiency and effectiveness of the standard-setting process.

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  • Mario Abela & Araceli Mora, 2012. "Understanding the Consequences of Accounting Standards in Europe: The Role of EFRAG," Accounting in Europe, Taylor & Francis Journals, vol. 9(2), pages 147-170, December.
    • Handle: RePEc:taf:acceur:v:9:y:2012:i:2:p:147-170
    DOI: 10.1080/17449480.2012.720872
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    References listed on IDEAS

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    1. Alain Burlaud & Bernard Colasse, 2011. "International Accounting Standardisation : Is Politics Back ?," Post-Print halshs-00665494, HAL.
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    8. David Alexander & Eva Eberhartinger, 2010. "The European Union Endorsement Process for International Financial Reporting Standards: A Telos-Based Analysis," Accounting in Europe, Taylor & Francis Journals, vol. 7(1), pages 37-62, June.
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    11. repec:dau:papers:123456789/7512 is not listed on IDEAS
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    Cited by:

    1. Hammed Afolabi & Ronita Ram & Gunnar Rimmel, 2022. "Harmonization of Sustainability Reporting Regulation: Analysis of a Contested Arena," Sustainability, MDPI, vol. 14(9), pages 1-26, May.
    2. Araceli Mora & Martin Walker, 2015. "The implications of research on accounting conservatism for accounting standard setting," Accounting and Business Research, Taylor & Francis Journals, vol. 45(5), pages 620-650, August.
    3. Carien Van Mourik & Peter Walton, 2018. "The European IFRS Endorsement Process – in Search of a Single Voice," Accounting in Europe, Taylor & Francis Journals, vol. 15(1), pages 1-32, January.
    4. Mora, Araceli, 2018. "The role of Politics and Economics in the International Financial Reporting Standards (IFRS) Adoption/La influencia de la política y la economía en la adopción de las Normas Internacionales de Informa," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 36, pages 407-428, Mayo.
    5. Gordon, Elizabeth A. & Gotti, Giorgio & Ho, Joanna H. & Mora, Araceli & Morris, Richard D., 2019. "Commentary: Where is International Accounting Research Going? Issues Needing Further Investigation," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 37(C).
    6. Raffaele Fiume, 2013. "Dialogue with standard setters," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2013(1), pages 169-173.
    7. Elkins, Hamilton & Entwistle, Gary & Schmidt, Regan N., 2021. "The influence of opportunistic capital structure disclosure in international financial reporting on nonprofessional investors," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 42(C).
    8. Igor Álvarez & José Calvo & Araceli Mora, 2014. "Involving academics in the accounting standard setting process: an application of the Delphi methodology to the assessment of IASB proposals," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(3), pages 765-791, August.
    9. Raffaele Fiume & Tiziano Onesti & Valerio Pieri, 2013. "Dialogue with standard setters," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2013(3-4), pages 169-189.
    10. Paola Ramassa & Alberto Quagli, 2024. "Interpreting IFRS: The Evolving Role of Agenda Decisions," Abacus, Accounting Foundation, University of Sydney, vol. 60(2), pages 205-235, June.
    11. Araceli Mora, 2013. "Increasing the relevance of "Policy Relevant Research"," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2013(1), pages 7-11.

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