Evaluating the statistical significance of de facto accounting harmonization: a study of European global players
Abstract
Two different forces are involved in the international harmonization of accounting: institutional endeavours to harmonize accounting internationally by developing common accounting rules and reporting standards, and spontaneous efforts by 'global players' to adopt accounting methods that will improve communication with users in other countries. These two developments are proceeding side by side, generally reinforcing one another but occasionally moving independently. This paper is primarily concerned with the process of harmonization of financial accounting within the European Union. The hypothesis we want to test is that, in spite of the obstacles to the harmonization of regulations in the European Union, there has been greater conformity in recent years in the accounting practices of companies which operate on the international stage. If so, the implications for the harmonization strategies of the international bodies are important. In this study, we first carry out a critical analysis of previous research on accounting harmonization, summarizing the methods used in empirical studies of de facto harmonization and the results obtained. We note that the major deficiency in the index-based methods of measuring harmonization is that no test of significance has been included in prior research. In this paper, we propose a bootstrapping test of the C index as a way of measuring the significance of the change in its value. We consider a sample of eighty-five 'global players' from thirteen countries and we analyse their financial statements with regard to four accounting issues (deferred taxation, goodwill, leasing and foreign currency translation), providing estimates of the significance of de facto accounting harmonization for the periods from 1991-2 to 1996-7.Download Info
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Bibliographic Info
Article provided by Taylor and Francis Journals in its journal European Accounting Review.
Volume (Year): 9 (2000)
Issue (Month): 3 ()
Pages: 349-369
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- repec:wop:humbsf:1995-63 is not listed on IDEAS
- J. L. Horowitz, 1995. "Bootstrap Methods In Econometrics: Theory And Numerical Performance," SFB 373 Discussion Papers 1995,63, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Horowitz, J.L., 1995. "Bootstrap Methods in Econometrics: Theory and Numerical Performance," Working Papers 95-10, University of Iowa, Department of Economics.
- Leo van der Tas, 1992. "Evidence of EC financial reporting practice harmonization," European Accounting Review, Taylor and Francis Journals, vol. 1(1), pages 69-104.
- Joel L. Horowitz, 1996. "Bootstrap Methods in Econometrics: Theory and Numerical Performance," Econometrics 9602009, EconWPA, revised 05 Mar 1996.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Patricia Teixeira Lopes & Lucia Lima Rodrigues, 2004. "Accounting practices for financial instruments. How far are Portuguese companies from IAS?," FEP Working Papers 150, Universidade do Porto, Faculdade de Economia do Porto.
- Jordi Perramon & Oriol Amat, 2006. "IFRS introduction and its effect on listed companies in Spain," Economics Working Papers 975, Department of Economics and Business, Universitat Pompeu Fabra.
- Macías Dorissa, Marta Pilar & Muiño Vázquez, Flora, 2011. "Examining dual accounting systems in Europe," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/12645, Universidad Carlos III de Madrid.
- Axel Haller, 2002. "Financial accounting developments in the European Union: past events and future prospects," European Accounting Review, Taylor and Francis Journals, vol. 11(1), pages 153-190.
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