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Anticipating the Impact of IFRS on the Management of German Manufacturing Companies: Some Observations from a British Perspective

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  • T. Colwyn Jones
  • Robert Luther

Abstract

The introduction of International Financial Reporting Standards (IFRS) in 2005 marked a significant departure from Germany's traditional financial accounting practices. This paper questions whether this change may have consequential effects on the distinctive traditional management accounting practices in the field of Controlling. We examine the possible impact on manufacturing companies drawing upon perceptions and expectations of managers in three Bavarian companies and two management consultancy firms. We consider whether financial accounting will assume an increased importance within firms, and whether this may lead to abandonment of some traditional management accounting practices and the adoption of different techniques in internal reporting compatible with the new IFRS regime for external reporting. This prompts consideration of whether such changes would lead to financial accounting domination of management accounting in Germany analogous to that argued by Johnson and Kaplan in 1987 in their ‘Relevance Lost’ thesis. We conclude that, at this juncture in the development of their information systems, German managers face an important choice between integrating external and internal reporting in ways that might fundamentally change established Controlling practices, or of continuing to operate dual accounting systems in much the same way as in the past so that adoption of IFRS is restricted to external reporting.

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  • T. Colwyn Jones & Robert Luther, 2005. "Anticipating the Impact of IFRS on the Management of German Manufacturing Companies: Some Observations from a British Perspective," Accounting in Europe, Taylor & Francis Journals, vol. 2(1), pages 165-193, January.
    • Handle: RePEc:taf:acceur:v:2:y:2005:i:1:p:165-193
    DOI: 10.1080/09638180500379160
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    1. Derek Matthews & Malcolm Anderson & John Richard Edwards, 1997. "The rise of the professional accountant in British management," Economic History Review, Economic History Society, vol. 50(3), pages 407-429, August.
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    1. Lantto, Anna-Maija, 2022. "Obtaining entity-specific information and dealing with uncertainty: Financial accountants' response to their changing work of financial reporting and the role of boundary objects," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 85(C).
    2. Becker, Albrecht, 2008. "Global or local? Travelling management accounting ideas," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 10(1), pages 16-20.
    3. David Procházka, 2014. "The IFRS Adoption and Its Impact on Financial and Management Accounting [Implementace IFRS a její vliv na vzájemné postavení finančního a manažerského účetnictví]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2014(1), pages 50-60.
    4. Barbara Weißenberger & Benjamin Löhr, 2008. "Planung und Unternehmenserfolg: Stylized Facts aus der empirischen Controllingforschung im deutschsprachigen Raum von 1990–2007," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 18(4), pages 335-363, February.
    5. Brandau, Michael & Endenich, Christoph & Trapp, Rouven & Hoffjan, Andreas, 2013. "Institutional drivers of conformity – Evidence for management accounting from Brazil and Germany," International Business Review, Elsevier, vol. 22(2), pages 466-479.
    6. Milena Peršić & Dubravka Vlašić, 2016. "Professional profile and education framework for managers in the Croatian health tourism sector," Tourism and Hospitality Industry 21, University of Rijeka, Faculty of Tourism and Hospitality Management.
    7. David Procházka, 2017. "The Unintended Consequences of Accounting Harmonization in a Transition Country: A Case Study of Management Accounting of Private Czech Companies," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 11(4), December.
    8. Cătălin Albu & Nadia Albu & Robert Faff & Allan Hodgson, 2011. "Accounting Competencies and the Changing Role of Accountants in Emerging Economies: The Case of Romania," Accounting in Europe, Taylor & Francis Journals, vol. 8(2), pages 155-184.
    9. Tyrrall, David & Woodward, David & Rakhimbekova, Almagoul, 2007. "The relevance of International Financial Reporting Standards to a developing country: Evidence from Kazakhstan," The International Journal of Accounting, Elsevier, vol. 42(1), pages 82-110.
    10. Patricia Teixeira Lopes & Rui Couto Viana, 2008. "The transition to IFRS: disclosures by Portuguese listed companies," FEP Working Papers 285, Universidade do Porto, Faculdade de Economia do Porto.
    11. Gonn Weide & Andreas Hoffjan & Pascal Nevries & Rouven Trapp, 2011. "Organisatorisch-personelle Auswirkungen einer Integration des Rechnungswesens–eine empirische Analyse," Schmalenbach Journal of Business Research, Springer, vol. 63(1), pages 63-86, February.
    12. Christian Engelen & Christoph Pelger, 2014. "Determinanten der Integration von externer und interner Unternehmensrechnung–Eine empirische Analyse anhand der Segmentberichterstattung nach IFRS 8," Schmalenbach Journal of Business Research, Springer, vol. 66(3), pages 178-211, May.
    13. Göttsche, Max & Küster, Stephan & Steindl, Tobias, 2021. "The usefulness of Non-IFRS segment data," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 43(C).
    14. Alessandro Mechelli, 2009. "Accounting Harmonization and Compliance in Applying IASB Standards: An Empirical Survey about the First Time Adoption of IAS 7 by Italian Listed Groups," Accounting in Europe, Taylor & Francis Journals, vol. 6(2), pages 231-270, December.
    15. Peter Kajüter & Martin Nienhaus, 2017. "The Impact of IFRS 8 Adoption on the Usefulness of Segment Reports," Abacus, Accounting Foundation, University of Sydney, vol. 53(1), pages 28-58, March.
    16. Christian Gross, 2016. "The Effect of the German Accounting Law Modernization Act on the Comparability of Private Local GAAP and IFRS Firms," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 17(3), pages 423-460, December.
    17. Cătălin Nicolae Albu & Nadia Albu & Robert Faff & Allan Hodgson, 2008. "The Changing Role Of Accountants In A Transition Economy - Evidence From Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(10), pages 1-5.
    18. Sara Trucco, 2016. "Managerial Information and Integrated Accounting Systems. The Perception of Italian Managers," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2016(1), pages 91-104.
    19. Bernhard Hirsch & Yvonne Schneider, 2010. "Erklärungs- und Gestaltungsbeiträge verhaltenswissenschaftlicher Theorien für eine integrierte Rechnungslegung," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 21(1), pages 7-35, June.

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