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Financial accounting and reporting in Germany: A case study on German accounting tradition and experiences with the IFRS adoption

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  • Fülbier, Rolf Uwe
  • Klein, Malte

Abstract

Financial accounting is rooted in national thoughts, traditions and institutional settings. As a consequence, accounting has developed heterogeneously over time and fulfilled contracting purposes in divergent national environments. Against this background, we argue that the ongoing process of accounting internationalization and imposed harmonization carries with it the danger of deforming country-specific balancing factors in the accounting systems, especially when the national environment for economic and contractual activities is not harmonized at all. In contrast to more evolutionary integration and adjustment processes of the past where spillover effects have always existed, the rapidity of the current process and coercive nature increases country-specific frictions. To support our argument and to substantiate the interplay of accounting as a contractual device and country-specific characteristics, we provide an in-depth case study of one country, Germany. We illustrate how the traditional German commercial law accounting system has evolved over time to meet specific contractual needs. We demonstrate how the current process of globalization and accounting internationalization has been attended by increasing frictions and challenges, especially on the contractual and regulatory level. We finally investigate the consequences on the German standard setting system, which also includes the changing role of German accounting research.

Suggested Citation

  • Fülbier, Rolf Uwe & Klein, Malte, 2013. "Financial accounting and reporting in Germany: A case study on German accounting tradition and experiences with the IFRS adoption," Bayreuth Working Papers on Finance, Accounting and Taxation (FAcT-Papers) 2013-01, University of Bayreuth, Chair of Finance and Banking.
    • Handle: RePEc:zbw:bayfat:201301
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    1. Elshandidy, Tamer & Shrives, Philip J., 2016. "Environmental Incentives for and Usefulness of Textual Risk Reporting: Evidence from Germany," The International Journal of Accounting, Elsevier, vol. 51(4), pages 464-486.

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    More about this item

    Keywords

    German Accounting; Accounting Research; HGB; Code Law; Legal System; Socioeconomic-Environment; Institutional Settings; SME; Book-Tax-Conformity; Debt Financing; Accounting History;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • N00 - Economic History - - General - - - General
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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