Measuring the Degree of International Harmony in Selected Accounting Measurement Practices

The I-index developed by Van der Tas and chi square tests suggested by Tay and Parker are used to quantify and assess the degree of harmony in selected accounting measurement practices of large companies from France, Germany, Japan, the UK, and the US. The results indicate significant differences in accounting for inventory, fixed assets, and investments among the countries. The 3 sub-topics that exhibited a high degree of harmony were the treatment of gains or losses on the disposal of fixed assets, short-term investments and long-term investments, a reflection of the preference of regulators and companies in the different countries for taking disposal gains and losses to income as they occur. Depreciation and inventory costing methods had the lowest I-index scores respectively, suggesting that the level of international harmony in these 2 basic accounting measurement practices is fairly low. It was found that the disclosure of information on accounting policies, even on fundamental accounting measurement methods such as inventory costing methods, tends to be quite low

International Accounting Harmonization and the Major Developed Stock Market Countries: An Empirical Study

The purpose of this study is to assess the extent to which the accounting measurement and associated disclosure practices of large listed companies have become more harmonized internationally. An empirical study of companies based in the five major developed stock market countries, namely, France, Germany, Japan, the United Kingdom and the United States, examines the results of the efforts made so far to reduce or eliminate diversity in accounting practices internationally. An evaluation of changes over the 20 year period from 1971/72 to 1991/92 shows that while progress has been made in some respects, international accounting harmonization has remained an elusive goal

Audit effectiveness preceding bankruptcy in UK financial institutions

This study investigates audit effectiveness (or the lack thereof) of audit opinions issued by auditors preceding company bankruptcies. Data from all 26 bankrupt UK financial institutions were used to determine if auditors appropriately issued opinions other than unqualified, as signs of non-going concern, and any differences in audit-opinion effectiveness between international and domestic audit firms. Results show that unqualified opinions issued was significantly higher than other opinions prior to bankruptcy. While international audit firms were less likely to issue unqualified opinions than their domestic counterparts, no firm issued adverse or disclaimer of opinions in any given year, despite serious warning signals from return on assets (ROA), return on equity (ROE) and current ratios.audit effectiveness; bankruptcy; going concerns; audit opinion; UK financial institutions.