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Commentary on Prospects for Global Financial Reporting

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  • Mary E. Barth

Abstract

This commentary reviews the current status of the global use of International Financial Reporting Standards (IFRS) and offers thoughts on the prospects for truly global financial reporting. The shift towards global use of IFRS is one of the biggest changes in financial reporting history. Although many countries require or permit the use of IFRS by firms listed on their capital markets, the global shift to IFRS is incomplete—both in terms of the required or permitted use of the standards and in terms of their varied application and enforcement around the world. In addition, the International Accounting Standards Board (IASB) has an active agenda to improve the existing standards. Thus, the lofty goal of truly global, high‐quality financial reporting has not yet been achieved. In fact, it probably is not completely achievable—there always will be variation in application and enforcement of the standards as well as scope for improving them. However, we can come closer to achieving the goal. It would be premature to abandon the goal now thereby forgoing the potential benefits it promises. Rather, we should develop plans for the next phase of the journey towards truly global financial reporting. Résumé L'auteure fait le point sur l'adoption des Normes internationales d'information financière (IFRS) à l'échelle mondiale et propose ses réflexions sur les perspectives en ce qui a trait à la mondialisation véritable de l'information financière. L'adoption généralisée des IFRS est l'une des transformations les plus ambitieuses de l'information financière à ce jour. Bien que de nombreux pays exigent ou permettent l'utilisation des IFRS par les sociétés faisant appel public à l'épargne sur leurs marchés financiers, la conversion demeure incomplète — au chapitre tant des exigences ou des autorisations d'utilisation des normes que des écarts observés dans leur adoption et leur application selon les pays. En outre, l'International Accounting Standards Board (IASB) poursuit activement un programme de perfectionnement des normes existantes. Le noble objectif de la production d'une information financière de qualité supérieure véritablement mondiale n'est donc pas encore atteint. En fait, sans doute ne le sera‐t‐il jamais puisqu'il subsistera toujours des écarts dans l'adoption et l'application des normes ainsi que dans la faculté de les améliorer. Il est toutefois possible de se rapprocher de l'objectif visé. Il serait prématuré d'abdiquer et de renoncer ainsi aux avantages susceptibles d'en découler. Nous devons plutôt établir des plans pour la prochaine étape de l'itinéraire vers une information financière véritablement mondiale.

Suggested Citation

  • Mary E. Barth, 2015. "Commentary on Prospects for Global Financial Reporting," Accounting Perspectives, John Wiley & Sons, vol. 14(3), pages 154-167, September.
    • Handle: RePEc:wly:accper:v:14:y:2015:i:3:p:154-167
    DOI: 10.1111/1911-3838.12046
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    References listed on IDEAS

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    1. Mary E. Barth & Wayne R. Landsman & Mark H. Lang, 2008. "International Accounting Standards and Accounting Quality," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 467-498, June.
    2. Lang, Mark & Smith Raedy, Jana & Wilson, Wendy, 2006. "Earnings management and cross listing: Are reconciled earnings comparable to US earnings?," Journal of Accounting and Economics, Elsevier, vol. 42(1-2), pages 255-283, October.
    3. Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "Corrigendum to "The effect of international institutional factors on properties of accounting earnings"; [Journal of Accounting and Economics 29 (2000) 1-51]," Journal of Accounting and Economics, Elsevier, vol. 30(2), pages 241-241, October.
    4. Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "The effect of international institutional factors on properties of accounting earnings," Journal of Accounting and Economics, Elsevier, vol. 29(1), pages 1-51, February.
    5. Mary E. Barth & Ron Kasznik & Maureen F. McNichols, 2001. "Analyst Coverage and Intangible Assets," Journal of Accounting Research, Wiley Blackwell, vol. 39(1), pages 1-34, June.
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    1. Trimble, Madeline, 2018. "A reinvestigation into accounting quality following global IFRS adoption: Evidence via earnings distributions," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 33(C), pages 18-39.

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