...International Journal of Accounting & Information Management The role of corporate governance in convergence with IFRS: evidence from China Yu Chen Zabihollah Rezaee Downloaded by UNIVERSITI MALAYSIA SABAH At 05:16 06 October 2015 (PT) Article information: To cite this document: Yu Chen Zabihollah Rezaee, (2012),"The role of corporate governance in convergence with IFRS: evidence from China", International Journal of Accounting & Information Management, Vol. 20 Iss 2 pp. 171 - 188 Permanent link to this document: http://dx.doi.org/10.1108/18347641211218470 Downloaded on: 06 October 2015, At: 05:16 (PT) References: this document contains references to 50 other documents. To copy this document: permissions@emeraldinsight.com The fulltext of this document has been downloaded 1824 times since 2012* Users who downloaded this article also downloaded: Songlan Peng, Kathryn Bewley, (2010),"Adaptability to fair value accounting in an emerging economy: A case study of China's IFRS convergence", Accounting, Auditing & Accountability Journal, Vol. 23 Iss 8 pp. 982-1011 http://dx.doi.org/10.1108/09513571011092529 Randy Moser, (2014),"IFRS and convergence in China and the USA", Journal of Technology Management in China, Vol. 9 Iss 1 pp. 56-66 http://dx.doi.org/10.1108/JTMC-12-2013-0042 Ronita D. Singh, Susan Newberry, (2008),"Corporate governance and International Financial Reporting Standard (IFRS): The case of developing countries", Research in Accounting in...
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...Convergence Project Financial Accounting Standards Board and International Accounting Standards Board By: Lydia Ferdin Our world is changing and sometimes in business, there are times when we must change our policies, standards, and guidelines as well to keep up with the natural changes in our environment. This leads to the idea of convergence as it relates to accounting. One of the world’s greatest naturalist and Greek professor Heraclitus (535 BC - 475 BC), once coined the theory and phrase “the only constant in life is change”. This is the same theory and philosophy that is used in business, specifically within the principles of the governing bodies and policies of accounting, today. The mission of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) is to improve domestic and international accounting standards for the benefit of present and future investors, including lenders, donors, creditors, and users of financial statements. The FASB and the IASB believes that pursuing convergence will make accounting standards and principles as similar as possible while adhering to the mission of the FASB. Convergence among national and international accounting standards would foster comparability with the use of internationally converged accounting standards. Comparable Standards would reduce costs to users and preparers of financial statements and make worldwide capital markets more efficient. The purpose of the FASB and the...
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...In the world of business records must be kept on how money is being utilized within a company whether it be private or public. IFRS and GAAP are two major accounting instruments that play a huge role in the accounting industry. IFRS stands for International Financial Reporting Standards. IFRS defines the accounting standards that are developed and approved by an independent, not-for-profit organization called the International Accounting Standards Board (IASB). The IASB is a private sector that was established in the year of 2011 and currently has 16 members. While GAAP, Generally Accepted Accounting Principles, is a combination of authoritative standards and simply the commonly accepted ways of recording and reporting accounting information. Both remain of high importance and hold differences as to why they are each valuable to the accounting process. STATEMENT OF FINANCIAL The format of a statement of financial or position under IFRS often differs from a balance sheet presented under Generally Accepted Accounting Principals. (Wiley, 2015, "The Accounting Information System") The reason being is that GAAP requires that the assets be listed in order depending of the measurement of liquidity. It is mandatory that GAAP's particular accounts be listed in a specific order depending on its hierarchy. The shareholders equity will be the last item recorded. In order to make things easier when recording future reports, cash must always be listed first. By listing the cash first, it...
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...Compare China and Japan in Accounting Standard and Recent Events, Which country is drifting further from Confucianism Introduction Chinese and Japanese accounting system has been influenced by Confucianism long time ago, but Bloom and Solotko(2003) proposed that because of the role of the government in the accounting system, both countries China and Japan has went far away from the Confucianism. In this report, the researchers will compare the accounting regulation and corporate governance in both countries, and get the conclusion which country is drifting further from the Confucian origins. This report has been divided into four parts. The first part will talk about the definition of the Confucianism and the implication of the Confucianism to both countries China and Japan. The second part is going to discuss the relationship between China accounting system and Confucianism; the third part will focus on the relationship between Japan accounting system and Confucianism. The last pat will compare the two accounting systems, and meanwhile get the conclusion which country has went further from the Confucianism. Definition of Confucianism Confucianism was founded by Confucius who is the Chinese philosopher and the first raised the Master of Ceremonies. The master of ceremonies gradually developed into the ideological system, which the core is the benevolence, and it’s in the hierarchical structure of society over 2000 years (XingZhong 2000). It exerts a far-reaching...
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...Abstract Creative accounting, as a matter of approach, is not objectionable by itself. However, when unethical elements make intrusion, the resultant accounting details become anything but true and fair. Creativity in such context is like referring to a half glass of water as half-full instead of describing it as half empty. While both statements are factually correct, they paint different picture and thus convey different images. Creativity in company accounting may arise under at least three different financial market conditions. The first is when a company floats its shares to attract investors to subscribe to such shares either at par or at a premium, depending on the financial market evaluation of the company’s future prospects. The second is when the company whose shares are already listed in a stock exchange, wants to paint an attractive picture of its financial conditions so that the shares may be quoted at a premium. Finally, a company having its shares listed in the stock exchange may declare and pay high dividends based on inflated profits through overvaluation of assets, undervaluation of liabilities and change in systems of stock valuation that may boost the image of the company at least in the short run. Unethical considerations in creative accounts have developed to such depths that terms like fraud audit and forensic accounting have gained currency and are becoming new professions. Accounting practitioners and auditors are increasingly required to appear...
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...1. Describe the process by which the accounting standards are set in Singapore. Within the jurisdiction of Singapore, the task of prescribing accounting standards comes under the purview of the Accounting Standards Council (ASC). The ASC receives its mandate from the Accounting Standards Act, which came into effect on 01 Nov 2007. It is responsible for prescribing accounting standards for companies, charities, cooperative societies and societies in line with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The formulation of accounting standards in Singapore follows a formal and rigorous process that comprises four successive stages—namely exposure, reviewing of comments, post exposure and Issuance of final standards. Exposure Stage The exposure stage is triggered in response to the IASB issuing an Exposure Draft (ED) on new IFRS; amendments to existing IFRS, International Accounting Standard (IAS); a draft Interpretation of the International Financial Reporting Interpretations Committee (IFRIC) or amendment to an existing Interpretation. ASC proceeds to issue its own ED on the proposed equivalent FRS (ED FRS) or draft Interpretation (ED INT FRS) for public comments. Extensive effort is also expended to proactively seek feedback from about 50 interested parties, comprising industry associations, Governmental bodies, listed companies, banks, securities firms and academic institutions. The ASC may also...
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...AC504: Ethical Issues in Business and Accounting Assignment #6 for Professor Gates By Nicholas Gainsbrugh Overview of the Australian Accounting Standards Board and Harmonization with IFRS Nicholas Gainsbrugh Unit 6 Assignment for Prof. Gates Assignment: An Overview of the Australian Accounting Standards Board and Harmonization with IFRS Abstract: The accounting profession in Australia is thriving. The number of accountants employed at the professional level has risen strongly over the past decade, from around one hundred thousand in 1997to over one hundred fifty thousand in 2006 and it has really skyrocketed from there for the last 6 years. This paper will discuss what actions that Australia should take with regard to the adoption or (Harmonization) of IFRS. Many dissenters have complained - pointing attention to the political dimensions of the decision. While it might be politically unattractive for Australia to surrender some of its power to set its own standards, it would also be unattractive for Australia to remain on the outside while important international agreements are being made. This paper will also look developments in the adoption and implementation of IFRS around the globe, with particular interests in certain countries that are … within scope – similar to Australia - countries such as Canada, China and India. And if harmonization is not really a sensible reality, then would compatibility be a close second? Something to hope for if you fall short...
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...Manual—Chapter 1 CHAPTER 1 Introduction 1.1 The Objective of This Book 1.2 Some Historical Perspective 1.3 A Note on Ethical Behaviour 1.4 The Complexity of Information in Financial Accounting and Reporting 1.5 The Role of Accounting Research 1.6 The Importance of Information Asymmetry 1.7 The Fundamental Problem of Financial Accounting Theory 1.8 Regulation as a Reaction to the Fundamental Problem 1.9 The Organization of This Book 1.9.1 Ideal Conditions 1.9.2 Adverse Selection 1.9.3 Moral Hazard 1.9.4 Standard Setting 1.9.5 The Process of Standard Setting 1.10 Relevance of Financial Accounting Theory to Accounting Practice Copyright © 2009 Pearson Education Canada Instructor’s Manual—Chapter 1 LEARNING OBJECTIVES AND SUGGESTED TEACHING APPROACHES 1. The Broad Outline of the Book I use Figure 1.1 as a template to describe the broad outline of the book and course. Since the students typically have not had a chance to read Chapter 1 in the first course session, I stick fairly closely to the chapter material. The major points I discuss are: • Accounting in an ideal setting. Here, present-value-based accounting is natural. I go over the ideal conditions needed for such a basis of accounting to be feasible, but do not go into much detail because this topic is covered in greater depth in Chapter 2. • An introduction to the concept of information asymmetry and resulting problems of adverse...
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...INTRODUCTION International Financial Reporting Standards (IFRS) In 2011, international financial reporting standards (IFRS) will replace generally accepted accounting principles (GAAP). This means Canadian publicly-traded companies will be required to present financial statements in accordance with IFRS. This change will not only affect those involved in the development of financial information but also those who use this information. Economic globalization brings increased demand for high quality, internationally comparable financial information. That’s why in 1999, CGA-Canada took the pioneering step of advocating for the convergence to IFRS in Canada and continues today to contribute to the evolution and adoption of IFRS. By providing our professional advice to the accounting community, ensuring the latest information and professional development opportunities are available to CGAs and keeping the CGA Program of Professional Studies current, the Association is well prepared for the transition to IFRS. CGA-Canada and International Standards-Setting CGA-Canada plays a critical role in international standards-setting through exposure draft comments and its international representation by virtue of being an International Federation of Accountants (IFAC) member body. Comments to the International Accounting Standards Board, the International Auditing and Assurance Standards Board, the International Ethics Standards Board for Accountants and the International Accounting Education...
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...www.ccsenet.org/ijbm International Journal of Business and Management Vol. 7, No. 3; February 2012 Adoption of International Financial Reporting Standards in Developing Countries: The Case of Nigeria Abdulkadir Madawaki College of Business, Universiti Utara Malaysia Sintok, 06010 Kedah, Malaysia E-mail: abdulkadirmadawaki@yahoo.com Received: September 16, 2011 doi:10.5539/ijbm.v7n3p152 Abstract The study focused on the adoption process of International Financial Reporting Standards (IFRS) on a developing economy, with particular reference to Nigeria. The paper is based on the data obtained from literature survey and archival sources in the context of the globalization of International Financial Reporting and the adoption of International Financial Reporting Standards (IFRS).Nigeria has embraced IFRS in order to participate in the benefits it offers, including attracting foreign direct investment, reduction of the cost of doing business, and cross border listing. In implementing IFRS Nigeria will face challenges including the development of a legal and regulatory framework, awareness campaign, and training of personnel. Recommendations were made to forestall such challenges which include strengthening education and training, establishment of an independent body to monitor and enforce accounting and auditing standards. Keywords: Financial reporting, Adoption, Accounting standard and Developing countries 1. Introduction Globalization of capital markets is an irreversible...
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...ANALYSIS OF BIOLOGICAL ASSETS VALUATION WITH FAIR VALUE ACCOUNTING AND HISTORICAL COST ACCOUNTING METHOD IN PLANTATION SUBSECTOR OF INDONESIAN AGRICULTURAL INDUSTRY IN THE PERIOD OF 2007-2012 Karina Putri Ramadhani1 and Indra Pratama2 1 Thesis Writer, Swiss German University 2 Thesis Advisor, Swiss German University Abstract The analysis of biological assets valuation with fair value accounting and historical cost accounting method in plantation subsector of Indonesian agricultural industry, in the period of 2007-2012, tries to evaluate the relevance of historical cost towards the fair value of biological assets. It also tries to look for empirical evidence on the differences in calculations on biological assets between FVA and HCA toward company’s EBIT, net income, and potential tax liabilities. The research tests 5 companies within the plantation subsector in agricultural industry listed in Bursa Efek Indonesia (BEI). This study shows that there is a strong correlation between all variables tested. Among all statistical tests conducted, all hypotheses are rejected. This study concludes that the historical value of biological assets does not represent its real fair market value, or irrelevant. Also, the change in biological assets valuation from historical cost to fair value accounting would significantly affect the company’s EBIT, tax expense, and net income. Keywords: Fair Value, Historical Cost, Agricultural Industry, Plantation, Fair Market, EBIT, Tax Expenses, Net Income...
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...PUBLIC SECTOR ACCOUNTING A. Institutional Framework for Public Sector Accounting 5. The institutional framework should include adherence to IFAC-issued International Accounting Standards. And it should support the groundwork for qualified accounting staff to provide the timely, relevant, and reliable financial information needed to support all fiscal and budget management, decisionmaking, and reporting processes. The diagnostic questionnaires that were used in this assessment collected information on the current arrangements and the apparent gaps in Maldives for accounting laws and regulations; education and training of public sector accountants; application of a code of conduct; and numbers and characteristics of public sector accountants. (1) Accounting Laws and Regulations 6. The Public Finance Act and the Financial Regulations are prescriptive about the maintenance and compilation of accounts but make no mention of International Accounting Standards. The Public Finance Act (see Annex C) should require conformance with International Public Sector Accounting Standards (IPSAS). However, under the Public Finance Act, there are proposed rules that would promulgate the allowance of IPSAS to be followed. The future accounts should be based on Cash Basis IPSAS with notes providing other information on assets, liabilities, and contingent liabilities as required by the Public Finance Act. Progression to accrual-based statements would occur as adequate computerized accounting systems are...
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...IFRS, International Financial Reporting Standards, are a set of accounting guidelines and standards just like the GAAP (American Institute of Certified Public Accountants, 2012). This is the first thing that Marie Claveau needs to understand, since the firms will be expecting people who can help in the adoption of the new international accounting standards. The standards were established by the international accounting standards board to become the globally accepted standards for use in the preparation of financial statements, in public companies. It is supposed to be a set of standards that can be used globally for the public companies, as well as private companies willing to use them as their accounting standards. Currently, it has been adopted in as many as 120 countries all over the world, with an aim of having an accounting standard that is uniform and easy for global accounting purposes (American Institute of Certified Public Accountants, 2012). Unlike each country having its own accounting standards, IFRS seeks to standardize accounting standards across the whole globe for easy comparison of accounts especially now when countries can no longer be independently sufficient economically (Securities of Exchange Commission, 2011). Thus, having an accounting standard accepted globally makes it easy for large companies and corporations to have an easy time and efficient accounting policies within all its global subsidiaries. Considering that, these firms will be engaged in the...
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...IAS 40 International Accounting Standard 40 Investment Property This version includes amendments resulting from IFRSs issued up to 31 December 2010. IAS 40 Investment Property was issued by the International Accounting Standards Committee in April 2000. In April 2001 the International Accounting Standards Board (IASB) resolved that all Standards and Interpretations issued under previous Constitutions continued to be applicable unless and until they were amended or withdrawn. In December 2003 the IASB issued a revised IAS 40. Since then, IAS 40 and its accompanying documents have been amended by the following IFRSs: • • • • • • • IFRS 2 Share-based Payment (issued February 2004) IFRS 4 Insurance Contracts (issued March 2004) IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (issued March 2004) IAS 1 Presentation of Financial Statements (as revised in September 2007)* Improvements to IFRSs (issued May 2008)* IFRS 9 Financial Instruments (issued November 2009)† IFRS 9 Financial Instruments (issued October 2010).† * † effective date 1 January 2009 effective date 1 January 2013 (earlier application permitted) © IFRS Foundation A1003 IAS 40 CONTENTS INTRODUCTION paragraphs IN1–IN18 INTERNATIONAL ACCOUNTING STANDARD 40 INVESTMENT PROPERTY OBJECTIVE SCOPE DEFINITIONS RECOGNITION MEASUREMENT AT RECOGNITION MEASUREMENT AFTER RECOGNITION Accounting policy Fair value model Inability to determine fair value reliably Cost model TRANSFERS...
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...Rewrite The Calendar. New York Times, March 7, Late Edition (east Coast). The New York Times writer and author Mr. Floyd Norris discussed a rarely-used international accounting standard or practice, known as the "true and fair" provision. During this article Norris is current, direct and authoritative, noting the reaction of other companies to Societe Generale's use of this type of a provision. The International Accounting Standards Board (IASB) writes these rules and standards, but there is not an international organization with the power to enforce these types of laws. Since the Societe Generale has come under a vast amount of scrutiny, because this company is using the rule unethically to disperse its losses over the two years in discussion, instead of one year. This dilutes the effect of a poor year financially, and can be considered earnings manipulation, according to the author. The accounting method employed by Societe Generale was approved by two of the biggest accounting firms in the world, Ernst & Young and Delloite & Touche. The author is very critical and clearly has vast knowledge of this subject, concluding that investors across the world should be worried about the unethical, though currently legal, accounting practices employed by Societe Generale. After critically evaluating these type of activities in international markets and interests of investors, lenders and companies’ one can conclude that these types of activities are becoming increasingly common globally...
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