The Principles-Based International Accounting Standards Training Model – The New Paradigm for Learning Competencies in Changing Economic Environment

The effort to achieve harmonization in the accounting practices of different countries requires that the content of International Financial Reporting Standards (IFRS) implies interpretability in their application. This feature, combined with the dynamics of economic processes at the national and global level, makes the study of IAS/IFRS a challenge for both teachers and students. The purpose of this paper is to systematize the approaches in training in the IFRS with a view to achieving sustainability and the possibility of upgrading the acquired knowledge, skills and competences. As a result of studies, the principles of the training process under IFRS have been defined. Based on them, a training model based on modules has been developed and presented in order to ensure consistency and flexibility in learning knowledge related to the theoretical statements and practical application of IFRS. As a result of the application of the model, a basic foundation of acquired skills and knowledge has been derived, which build the trained students as highly qualified specialists in this field

Earnings And Balance Sheet Conservatism In Malaysia: The Effect Of Malaysia's Convergence To International Financial Reporting Standards (Ifrs)

The objective of this paper is to examine the impact of International Financial Reporting Standards (IFRS) on both earnings and balance sheet conservatism in Malaysia. Earnings conservatism has been used extensively in common-law countries such as the United States (US) and the United Kingdom (UK), which are known to have good financial reporting quality. In contrast balance sheet conservatism is more evident in code-law countries such as Japan and France, where accounting practice is highly influenced by the institutional culture similar to Malaysia such as political connection and family-firms. Since Malaysia uses international accounting standards adopted from common-law countries, we hypothesise that earnings conservatism will increase whereas balance sheet conservatism will decrease after the incorporation of IFRS in the financial reporting environment. Consistent with the hypothesis, we find that earnings conservatism and balance sheet conservatism increase and decrease respectively after Malaysia's convergence to IFRS. The results indicate that Malaysia has successfully adopted IFRS from common-law countries as earning conservatism increase after IFRS convergence

Earnings and Balance Sheet Conservatism in Malaysia

The objective of this paper is to examine the impact of International Financial Reporting Standards (IFRS) on both earnings and balance sheet conservatism in Malaysia. Earnings conservatism has been used extensively in common-law countries such as the United States (US) and the United Kingdom (UK), which are known to have good financial reporting quality. In contrast balance sheet conservatism is more evident in code-law countries such as Japan and France, where accounting practice is highly influenced by the institutional culture similar to Malaysia such as political connection and family-firms. Since Malaysia uses international accounting standards adopted from common-law countries, we hypothesise that earnings conservatism will increase whereas balance sheet conservatism will decrease after the incorporation of IFRS in the financial reporting environment. Consistent with the hypothesis, we find that earnings conservatism and balance sheet conservatism increase and decrease respectively after Malaysia's convergence to IFRS. The results indicate that Malaysia has successfully adopted IFRS from common-law countries as earning conservatism increase after IFRS convergence

Efeitos da diversidade contabilística na análise financeira : o caso particular do goodwill

Na União Europeia, o tratamento contabilístico do goodwill continua a ser um dos tópicos em que a diversidade contabilística prevalece, apesar dos esforços que a Comissão Europeia tem desenvolvido no sentido da harmonização. Neste estudo, investiga-se até que ponto a diversidade contabilística existente (amortização versus testes de imparidade) tem implicações significativas para a análise dos principais rácios financeiros das empresas da Península Ibérica. Para isso, são analisadas as demonstrações financeiras de um conjunto de empresas portuguesas e espanholas cotadas, preparadas de acordo com as Normas Internacionais de Relato Financeiro (IFRS). Procede-se a uma reformulação dessas demonstrações financeiras, utilizando a amortização do goodwill por oposição aos testes de imparidade anuais, para perceber de que modo os rácios financeiros seriam afetados em consequência das alterações decorrentes da aplicação de diferentes princípios contabilísticos. Para avaliar a significância estatística utiliza-se o teste não paramétrico Wilcoxon Signed Rank Test. Os resultados obtidos evidenciam que a amortização do goodwill apresenta um impacto significativo nos rácios de solvabilidade, endividamento e rentabilidade, o que sugere que a aplicação de diferentes critérios contabilísticos não é inócua para a análise financeira. Estes resultados reforçam igualmente estudos anteriores que sugerem que o modelo de testes de imparidade potencia o reporte de resultados inflacionados que distorcem os rácios financeiros apresentados.In the European Union, goodwill treatment is one of the main topics were accounting diversity is still a reality, nevertheless the efforts of the European Commission in the development of the harmonization process. This study seeks to ascertain, on an empirical basis, whether the existence of diversity in accounting principles (amortization vs. impairment) has significant consequences for the interpretation of financial ratios on the Iberian Peninsula level. Therefore, we have examined the financial statements of a sample of Portuguese and Spanish listed companies following the International Financial Reporting Standards (IFRS). We reformulated the financial statements using amortization of goodwill instead of the impairment test to understand how financial ratios would be affected as the basis of financial statement changes from the application of other accounting principles. To evaluate statistical significance we applied the non-parametric test Wilcoxon Signed Rank test. The results indicate that periodic amortization of goodwill has a significant impact on solvency, indebtedness and profitability ratios which suggest that the accounting principles applied are not innocuous to financial analyses. These results reinforce previous studies that suggested that the impairment model led to temporarily inflated earnings and goodwill balances which distort financial ratios presented

Fair value accounting and the financial market crisis. To what extent is fair valuation responsible for the financial crisis?

The subprime financial crisis impacted the economy on a global level and was accompanied by manifold discussions regarding the involvement of fair value accounting principles. The debate reached its temporary peak in late 2008, when the IASB amended the rules of fair value accounting for seriously distressed financialinstitutions to prevent further recognition of fair value losses. During the last decades, European financial markets showed a strong trend towards liberalization, deregulation and economic integration, but at the same time these developments are held responsible to make financial systems more unstable, fragile, and prone to crisis. This study investigates the recurrent occurrence of financial crises in general thereby focusing on the interdependence between thelatest subprime crisis and fair value financial instruments of European banks in particular. Financial institutions play an important role in financial crises as they are the predominant appliers of fair value accounting principles under IAS 39. The business models of financial institutions are presented and the associated risk types indicate the increased vulnerability towards market interruptions. The consideration of several preceding financial crises shows that they may be triggered under different scenarios. However, they follow a similar pattern and have some comparable characteristics. In this context an “ideal-typical” course of a financial crisis in developed economies is presented. The study shows that fair value accounting was not responsible for the latest crisis. However, there are legitimate concerns about financial reporting at fair value that came to the fore during times of crisis. Critics argue that fair value accounting leads to instability in financial markets due to irrational investors’ behavior, procylicality, liquidity problems, and increases of company-specific subjectivity in absence of market prices. Using a comprehensive sample of 316 European IFRS applying financial institutions, the impact of fair value accounting throughout European banks is examined and upon procyclical effects of fair value financial instruments observed during the period 2006 to 2010. As a result, the sample provided no or only minor evidence that fair value accounting added additional procyclicality to European banks’ financial statements. Fair value accounting seems to be the appropriate measure for certain financial instruments and a first step in the right direction. However, the financial crisis revealed certain weaknesses in the area of fair value accounting and several proposals for improvement are discussed

Uma abordagem à harmonização contabilística internacional na América Latina

A difusão das normas do International Accounting Standards Board [IASB] nos países e nas empresas tem sido objeto de muito debate na literatura contabilística, havendo a preocupação de saber até que ponto as normas nacionais estão completamente desinstitucionalizadas e as normas do IASB estão a ser cumpridas. Esta tese usa a Teoria Institucional e estende o modelo de Rodrigues e Craig (2007) para estudar a difusão das normas do IASB nos países da América Latina, mais particularmente em treze países que compõem o GLENIF – Grupo Latino-americano de Emissores de Normas de Informação Financeira. Usando uma análise macro institucional e um paradigma de investigação interpretativista, os dados foram recolhidos através de entrevistas aos representantes de treze países que fazem parte do GLENIF, e triangulados usando fontes de arquivo. A pesquisa efetuada permitiu-nos concluir que este organismo regional de normalização contabilística foi impulsionado pelo IASB que atuou como empreendedor institucional. Discursos poderosos relacionados com razões quer eficiência quer de legitimidade foram feitos para incentivar a adoção ou convergência com as normas do IASB, por cada um dos países. Atores relacionados com a profissão (e no caso de países em que a profissão tem menos recursos, o Banco Inter-Americano para o Desenvolvimento) mobilizaram recursos acreditando que esta adoção/convergência é importante por aumentar o estatuto social, atuando desta forma como empreendedores institucionais. Outros atores importantes no processo de mudança foram as bolsas e os governos. Contudo, quando analisado mais em detalhe verifica-se que o processo de adoção ou convergência em cada um dos países encontra-se em diferentes fases, enfrentando em alguns países algumas resistências à mudança que decorrem fundamentalmente de lógicas institucionais conflituantes com as normas do IASB, nomeadamente as lógicas do sistema fiscal e do setor financeiro numa região latina. Do confronto destas lógicas dialéticas verifica-se que se observam várias sínteses que levam a diferentes categorias de adoção/convergência em cada país, ou mesmo apenas à adoção voluntária por apenas um grupo pequeno de empresas, com vários tipos de normas a coexistir ao mesmo tempo em cada país. Verifica-se ainda que se ao nível da harmonização formal a adoção/convergência dependem destas lógicas institucionais, ao nível da harmonização material as barreiras culturais e os custos com a mudança, nomeadamente a falta de profissionais qualificados e a falta de sistemas de enforcement levam a que facilmente apareça o decoupling ou loose-coupling. Os resultados revelam ainda que nos países pequenos, com menos recursos e onde a profissão está menos desenvolvida, a decisão foi de adoção das normas do IASB, em vez da convergência. Quando observados quais os países onde se está a dar a convergência para atender ao seu próprio contexto, verifica-se que tal acontece nos países grandes, com mais recursos e com uma profissão mais estabelecida (Argentina, Brasil e México).The diffusion of the standards of the International Accounting Standards Board [IASB] in countries and companies has been the subject of much debate in the accounting literature. There is a concern about the extent to which national standards are fully deinstitutionalized and IASB standards are being complied This thesis uses the Institutional Theory and extends the model of Rodrigues and Craig (2007) to study the diffusion of the IASB standards in Latin America, more particularly in thirteen countries that compose the GLASS – Group of Latin-American Accounting Standards Setters. Using a macro institutional analysis and an interpretive research paradigm, data were collected through interviews with representatives from thirteen countries that are part of GLASS, and triangulated using archival sources. The research carried out allowed us to conclude that this regional body of accounting standards was driven by the IASB who was an institutional entrepreneur. Powerful discourses related to the need to increase efficiency and legitimacy were made to encourage the adoption or convergence with the IASB standards in each country. Actors related to the profession (and in the case of countries where the profession lacked resources, the Inter-American Development Bank) mobilized resources believing that this adoption/convergence is important to increase the profession social status, acting as institutional entrepreneurs. Other key players in the change process are the capital markets and governments. However, when analyzed in more detail the adoption or convergence process in each country, we conclude that it is at different phases, with some countries experiencing some resistance to change which mainly arises from conflicting institutional logics, namely the institutional logic of the tax system and of the financial sector in a Latin region. The confrontation of these dialectical logics led to different categories of adoption/convergence in each country, or led to the voluntary adoption by only a small group of companies. This way, various types of accounting standards can coexist at the same time in each country. Additionally, if the level of formal harmonization depends on these institutional logics, the level of material harmonization depends on cultural barriers and the costs of change, including the lack of qualified professionals and the lack of enforcement systems. These difficulties can lead to decoupling or loose-coupling. The results also show that in smaller countries with fewer resources and where the profession is less developed the decision was generally the adoption of IASB standards. Large countries with more resources and a more established profession (Argentina, Brazil and Mexico) preferred the convergence of the IASB standards.Programa Doutoral em Contabilidad