CHAPTER 1: INTRODUCTION
The harmonisation and standardisation of financial reporting standards, both in Europe as well as worldwide, presents a contemporary issue that is gaining increasing importance nowadays. (Wöltje 2005) This issue has attracted publicity and has caught a lot of attention particularly during the recent years and, moreover, it still does so. The complex phenomenon of globalisation can be considered as one reason for this. (Wöltje 2005) Globalisation creates an increasing number and variety of cross-border transactions which in turn cause a greater demand for high quality and above that in particular comparable information in the finance and accounting sector. (Johnson and Turner 2006) Consequently, the debate whether there exists a need for harmonisation and standardisation of financial reporting standards, or not, is fuelled by globalisation. Therefore, it can be argued that there arises a need for international financial reporting standards to supply potential stakeholders with required information about foreign operations and transactions. (Elliot and Elliot 2006)
In order to understand, if there is a growing need for the harmonisation and standardisation of financial reporting standards in its deeper significance and meaning, it is essential to understand the background of these processes.
The second chapter, the literature review, therefore, analyses the underlying reasons for the existing differences in the national financial reporting standards. This will be done by referring to the work of key authors like Roberts et al. (1998), Nobes and Parker (2000), Choi et al. (1999), as well as others.
CONTENTS
CHAPTER 1: INTRODUCTION 3
CHAPTER 2: LITERATURE REVIEW 5
2.1 Differences in national accounting systems and their causes 5
2.1.1 The political and economic system 7
2.1.2 The legal system 8
2.1.3 The financial system: taxation 8
2.1.4 The professional system: the accounting profession 9
2.2 Is Harmonisation and Standardisation desirable? 10
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2.3.2 Brief overview of the history of international financial reporting standards setting 17
2.3.3 Benefiting Parties 17
CHAPTER 3: METHODOLOGY 19
CHAPTER 4: SECONDARY EVIDENCE 23
4.1 International Financial Reporting Standards IFRSs 23
4.1.1 International Accounting Standards Board IASB 23
4.1.2 The IFRS System 24
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4.1.2.3 The Interpretations 27
4.2 Implementation of IFRS 27
4.2.1 First time adoption of IFRSs 27
4.2.2 Implementation of IFRSs around the world 28
CHAPTER 5: CONCLUSION 30
REFERENCES 32
BIBLIOGRAPHY 35
APPENDICES 36
Appendix 1 36
Appendix 2 36
Appendix 2 37
Appendix 3 40
Appendix 4 44
