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The Complex Equilibrium Paths towards International Financial Reporting Standards (IFRS) and the Anglo-American Model: The Case of Japan

Listed author(s):
  • Noriyuki Tsunogaya

    (Department of International Economy and Business, Kyushu University, Japan)

  • Parmod Chand

    (Department of Accounting and Corporate Governance, Macquarie University, Australia)

Registered author(s):

    We adopt the accounting ecology framework of Gernon and Wallace (1995) to investigate the unique Japanese process of accounting reforms and convergence. The uniqueness of the Japanese accounting framework is primarily the result of the integration of the Japanese traditional accounting system and its surrounding infrastructures with International Financial Reporting Standards (IFRS), the Anglo-American model, and the liberal market economies (LMEs). The objective of this study is to demonstrate that accounting as the language of business is deeply embedded in the historical, legal, business and economic environments of each country and that these contextual factors cannot be ignored in the process of significant accounting reforms, including accounting convergence. The paper provides evidence that even in the process of global accounting convergence countries are not achieving de facto convergence because optimal mechanisms of the accounting system and its surrounding infrastructures are contextual and embedded in the accounting ecology of each country.

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    Article provided by Research Institute for Economics & Business Administration, Kobe University in its journal The Japanese Accounting Review.

    Volume (Year): 2 (2012)
    Issue (Month): (December)
    Pages: 117-137

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    Handle: RePEc:kob:tjrevi:dec2012:v:2:p:117-137
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    1. Reinhard H. Schmidt & Marcel Tyrell, 2005. "Information Theory and the Role of Intermediaries in Corporate Governance," Working Paper Series: Finance and Accounting 142, Department of Finance, Goethe University Frankfurt am Main.
    2. Suzanne J. Konzelmann, 2005. "Varieties of Capitalism: Production and Market Relations in the USA and Japan," British Journal of Industrial Relations, London School of Economics, vol. 43(4), pages 593-603, December.
    3. Richard Baker & Yuri Biondi & Qiushong Zhang, 2010. "Disharmony in international accounting standards setting: The Chinese approach to accounting for business combinations," Post-Print hal-00565498, HAL.
    4. Doupnik, Timothy S. & Riccio, Edson Luiz, 2006. "The influence of conservatism and secrecy on the interpretation of verbal probability expressions in the Anglo and Latin cultural areas," The International Journal of Accounting, Elsevier, vol. 41(3), pages 237-261.
    5. Benston, George J. & Bromwich, Michael & Litan, Robert E. & Wagenhofer, Alfred, 2006. "Worldwide Financial Reporting: The Development and Future of Accounting Standards," OUP Catalogue, Oxford University Press, number 9780195305838.
    6. Andreas Hackethal & Reinhard H. Schmidt & Marcel Tyrell, 2005. "Banks and German Corporate Governance: on the way to a capital market-based system?," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(3), pages 397-407, May.
    7. Schmidt, Reinhard H & Spindler, Gerald, 2002. "Path Dependence, Corporate Governance and Complementarity," International Finance, Wiley Blackwell, vol. 5(3), pages 311-333, Winter.
    8. Junichi Chiba, 2001. "The designing of corporate accounting law in Japan after the Second World War," Accounting History Review, Taylor & Francis Journals, vol. 11(3), pages 311-330.
    9. Masato Kikuya, 2001. "International harmonization of Japanese accounting standards," Accounting History Review, Taylor & Francis Journals, vol. 11(3), pages 349-368.
    10. Doupnik, Timothy S. & Richter, Martin, 2003. "Interpretation of uncertainty expressions: a cross-national study," Accounting, Organizations and Society, Elsevier, vol. 28(1), pages 15-35, January.
    11. Julian Franks & Colin Mayer, 1997. "Corporate Ownership And Control In The U.K., Germany, And France," Journal of Applied Corporate Finance, Morgan Stanley, vol. 9(4), pages 30-45.
    12. Dore, Ronald, 2000. "Stock Market Capitalism: Welfare Capitalism: Japan and Germany versus the Anglo-Saxons," OUP Catalogue, Oxford University Press, number 9780199240616.
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