Monica Veneziani

The costs and benefits of IFRS implementation in the UK and Italy

Purpose - The purpose of this paper is to examine the opinions of national stakeholders on the costs and benefits of International Financial Reporting Standards (IFRS) implementation and to determine whether countries with disparate social, economical and political backgrounds have different experiences when complying with IFRS. Design/methodology/approach - Semi-structured interviews were conducted with preparers, users and auditors of annual reports and accounting regulators in the UK (including Ireland) and Italy. Findings - There were some differences in the experiences of IFRS implementation between stakeholders from different countries. However, there was widespread agreement that costs exceeded the benefits of reporting under the new standards. Further it is recognised that international standard-setters have a large set of stakeholder views to manage and it is therefore important that standard-setters are aware of the costs and benefits of their accounting requirements. Originality/value - This analysis is useful for companies that have not already adopted IFRS. It explains the differences and similarities of the costs and benefits of IFRS implementation from an Anglo-Saxon and an EU continental perspective.

A cross‐country analysis of IFRS reconciliation statements

Purpose - One of the most fundamental changes to affect financial reporting in recent years has been the introduction of International Financial Reporting Standards (IFRS). This paper aims to examine the nature of the Income Statement and Net Equity IFRS adjustments for a sample of companies from the UK, Ireland and Italy following the introduction of IFRS. Design/methodology/approach - A sample of IFRS Reconciliation Statements are examined to identify the most significant IFRS adjustments. Using an index of conservatism, these amounts are further analysed to assess their impact on the accounting numbers reported under previous national GAAP. Findings - For all three countries, the IFRS profit was greater than that reported under previous national GAAP. IFRS also had a significant effect on net worth; while UK and Italian companies experienced an increase in equity upon the adoption of IFRS, the Irish firms in the sample recorded a decrease. The analysis also indicated that the impact of IFRS on profit and net worth was primarily attributable to a few core standards including IFRS 2, IFRS 3, IFRS 5, IAS 10, IAS 12, IAS 16, IAS 17, IAS 19, IAS 38 and IAS 39. Practical implications - A multi-country perspective for future IFRS research is required as the impact of individual IFRS varies in importance from one country to another. Originality/value - By analysing the IFRS that have had a significant impact on accounting numbers prepared under previous national GAAP, opportunities for future research are identified.

International Accounting Education Standards Board: Organisational legitimacy within the field of professional accountancy education

Abstract This research considers the organisational legitimacy of the International Accounting Education Standards Board (IAESB), and whether it is perceived or accepted as the appropriate standard setter for professional accountancy education across the globe. We define the organisational field in which the IAESB operates to influence education practice, and frame the research through the lens of both strategic and institutional traditions of organisational legitimacy. In this context, we examine the extent to which 21 selected professional accountancy bodies, operating in diverse jurisdictions across the globe, disclose compliance with IAESB pronouncements. Our results show that disclosed compliance does not always indicate conformity of practice amongst the professional bodies which have obligated themselves to comply with International Education Standards (IES). We discuss reasons for this varied immunity to IES practice and the impact this has on the IAESB achieving its self-declared objective of developing and influencing globally acceptable and implementable standards for professional accountancy education. This research should be useful to professional accountancy educationalists, and to the IAESB in pursuit of its objective.

The Reporting Entity in Private-Public Accounting Harmonisation. Is Control Enough for the Local Government Consolidated Financial Statements?

The European Commission initiated a discussion on the expediency of using the International Public Sector Accounting Standards (IPSAS), based on the IAS/IFRS, as a common base for harmonizing the public sector accounting systems of the member states. However, literature suggests that accounting is not neutral with respect to the economic, social and political dimensions. In the perspective of evolution of the accounting regulation outlined, balanced between accountability, with the need to represent phenomena for reporting pur-poses, and decisionmaking issues, which concentrates on the quantitative importance of the values, the paper aims to analyse the effects of the application of different criteria for the definition of the reporting entity of the local government consolidated financial statements (CFS). The Italian PCA 4/4, the test of control and the financial accountability approaches are examined. The evidence that emerged from the case studies examined identifies several criticalities in the Italian PCA 4/4 and support the thesis that the financial accountability approach is more effective in providing a complete representation of the public resources entrusted to and managed by the group, whereas the control approach better approximates quantification of the group results in terms of central government surveillance. The analysis highlights the importance of the post implementation review period and the opportunity to contextualize the adoption of the consolidated financial statement in the broader spectrum of the accounting harmonization process, participating in the process of definition of the European Public Sector Accounting Standards (EPSAS).

Effects of the IFRS On Financial Communication in Italy: impact on the consolidated financial statement

A fundamental step for European companies towards accounting harmonisation was the issue of Regulation no.1606 dated 19th July 2002 in which the European Union obliges listed companies to draw up their consolidatedfinancial statements as from 2005 according to the principles of the International Accounting Standards Board(IASB).For Italian companies in particular, introduction of the International Financial Reporting Standards (IFRS) willinvolve important changes as it will impose modifications on the accounting culture with consequences not only atoperating but also at organisational level: efforts in terms of time and resources employed will therefore beconsiderable.The topic is therefore of great relevance today and can be tackled from different aspects.One of the areas considered most critical is understanding of the effects and changes (deriving from introduction ofthe IFRS) in terms of financial communication and assessment of financial performances for companies subject tothe process of harmonisation.As the main aim of the study, we have therefore chosen to analyse and focus attention on the above effects withspecific reference to construction of the consolidated financial statements of listed Italian parent companies at thehead of non-financial groups in particular.

The Role of University in the Education of Professional Accountants： Degree of IES 2 Application

In the period following the beginning of the global economic crisis, the quality of the education provided to support the accounting profession was debated. Simultaneously, Education for Sustainable Development (ESD) is becoming increasingly important. The change in the accounting profession and in accounting education offers an opportunity to formulate initial observations on the Italian university world in terms of the preparation of future professional accountants. This study uses the International Education Standards (IESs) published by the International Accounting Education Standards Board (IAESB), in particular the IES 2 (content of professional accounting education programs). The aim of the paper, which is of an empirical nature, is to understand the role of universities in Italy in the preparation of accountants in the light of the IES 2 provisions. The study and its policy implications may contribute to the debate on accounting education at national and international levels, also in the light of ESD.

Who Influences Whom? An Exploratory Analysis of the Interrelations between Accounting Research and the IASB’s Standard Setting Activity

This study investigates the interrelations between accounting research and the IASB activity. Prior research shows a significant gap between academia, the standard setters and the accounting profession and underlines the failure of academic papers to contribute to accounting practice. Although we find some evidence of the intention of the IASB to fill the gap between accounting theory and practice, our analysis confirms the existence of a significant distance between financial accounting research and the IFRSs. The IASB ‘due process’ definitely influences the academic activity, but the accounting literature does not seem to represent a cornerstone for the IFRSs. Particularly, during the ‘due process’ steps that precede the P.I.R. phase, the IASB only quotes few papers. With the P.I.R. process, the number of research papers analysed by the IASB significantly increases, but it is not yet clear how this ex-post activity might really influence the IFRSs statements. Finally, we find that the traditional academic ranking systems are not a key factor driving the IASB selection of the articles to analyse during the P.I.R. process. This evidence sheds light on the risk of an unfruitful self-referentiality of the accounting academic literature and on the self-feeding nature of the academic world.

Impairment Test and Disclosure: An International Comparison

Introduction of the IAS/IFRS entails important changes for European companies, characterised by different accounting systems, including assessment and accounting of the impairment test which is one of the most fundamental issues. Our attention focuses on companies listed in the main European Stock Exchange Indexes (S&P/Mib, CAC 40 and FTSE 100) in which the impairment test is one of the most critical elements of company management. After a brief presentation of the main characteristics of the IAS 36, the aim of this paper is to study the effects of IAS 36 application on financial disclosure via an empirical analysis. The level of disclosure regarding the impairment test is compared among the three indexes and is studied in greater depth (69 items). In the paper the focus is on disclosure since, as the scholars also agree, financial communication does not represent a neutral process but affects the behaviour of the recipients, and consequently that of the prepares. Consolidated financial reports of 2006 and 2007 have been analysed: empirical results confirm that there are a lot of differences in disclosure level among the three countries and between companies with and without an impairment loss.