Has IFRS Enhanced Accounting Uniformity?

• Siciliano, Gianfranco 

Indexed by

ESCI ABDC-A

Abstract

I　examine　the　effect　of　International　Financial　Reporting　Standards　(IFRS)　adoption　on　the　accounting　uniformity　of　financial　statements　for　a　sample　of　large　firms　listed　on　Euronext.　Using　Taplin’s　(A　unified　approach　to　the　measurement　of　international　accounting　harmony*.　Accounting　and　Business　Research,　34(1),　57–73)　uniformity　index,　I　find　that　IFRS　enhances　uniformity　of　financial　statements　of　firms　within　the　same　country　(national　uniformity)　and　between　countries　(international　uniformity).　The　change　in　uniformity　is　not,　however,　homogeneous　within　and　across　jurisdictions　that　are　subject　to　different　accounting　regulations　before　IFRS　adoption.　Those　countries　whose　local　GAAP　was　further　from　IFRS　prior　to　adoption　experience　a　greater　increase　in　uniformity　after　IFRS　adoption.　I　also　find　that　international　uniformity　is　increased　most　for　items　where　IFRS　eliminated　divergence　with　local　GAAP　and　for　items　where　no　regulation　existed　under　local　GAAP;　when　IFRS　preserved　the　accounting　choice　set　prescribed　under　local　GAAP,　uniformity　does　not　increase.　The　main　contribution　relies　on　showing　that　the　various　forms　of　the　relationship　local　GAAP-IFRS　prior　to　the　shift　matter　when　examining　the　direct　effect　of　IFRS　adoption　on　the　convergence　of　financial　reporting　practices.

Keyword

• Accounting uniformity
• Local GAAP
• IFRS
• Euronext

Author Community

[Siciliano, Gianfranco] China Europe International Business School

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