Reconciling national with international accounting standards

Adams, C. A., Weetman, P. and Gray, S. J. (1993) Reconciling national with international accounting standards. European Accounting Review, 2(3), pp. 471-494. (doi:10.1080/09638189300000048)

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The IASC has suggested a number of ways by which listed companies could present financial statements that conform with International Accounting Standards (IAS). This paper considers the feasibility and usefulness of those options. In particular, the reconciliation of domestic financial statements to IAS, and the degree of harmonization likely to be achieved as a result, is examined by means of an empirical study of Finnish corporate reports. The reconciliations and other IAS information provided by the unique case of seventeen Finnish companies are examined in detail over a three-year period. Gray's index of conservatism (Gray, 1980) is used to examine the impact on profit and shareholders' equity of the various adjustments in the reconciliations.It is concluded that the insight provided by the IAS information is limited due to: the reduced quality of information provided regarding the Finnish (FAS) and IAS accounting policies followed; the combination of adjustments, some of which are material, included under ‘other items'; the lack of an adjustment or explanation in some cases where FAS and IAS policies obviously differ; inadequate explanation as to the nature, magnitude and direction of the adjustments; and the lack of consistency in presentation. The authors conclude by suggesting some ways forward for the IASC in conjunction with the International Organization of Securities Commissions (IOSCO).

Item Type:Articles
Glasgow Author(s) Enlighten ID:Adams, Professor Carol and Weetman, Professor Pauline
Authors: Adams, C. A., Weetman, P., and Gray, S. J.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:European Accounting Review
Publisher:Taylor and Francis
ISSN (Online):1468-4497

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