An Investigation of the Relationship Between Use of International Accounting Standards and Source of Company Finance in Germany

By: Ann Tarca, Melissa Moy and Richard D. Morris

This study examines the relationship between use of international accounting standards and companies’ source of finance. We Investigate the proposition contained in Nobes’ (1998) model which postulates ousider companies (those with a higher level of public finance) in weak equity-outsider markets (capital markets where public equity finance is not dominant source of finance) are more likely to change their type of accounting system from one focused on information for creditors and tax authorities to one that meets the needs of external financiers. We considered 176 German listed companies during the financial year 1999. Our result support Nobes’ (1998) model as we found companies with more ousider finance (represented by the proportion of shares held by outsiders and the amount of public debt) were more likely to use international standards (US GAAP or IAS). Considering companies’ choice of US GAAP or IAS, we found companies selecting US GAAP rather than IAS were more likely to have a higher level of outsider finance.

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Financial Statment Effect of Adopting International Accounting Standars: The Case of Germany

by: Mingyi Hung and K.R. Subramanyam

This study investigates the effects of adopting International Accounting Standards (IAS) on financial statements and their value relevance for a sample of German firms during 1998 – 2002. By implementing an innovative research design we compare accounting numbers reported under German accounting rules (HGB) with those under IAS for the same set of firm-years, and document how IAS adoption changes key financial measures and the value relevance of financial statement information. While HGB is stakeholder-oriented and commonly viewed as a historical cost accounting model that emphasizes income smoothing, IAS is shareholder-oriented and generaly percieved as a fair-value accounting model that emphasizes balance sheet valuation. Consistent with these perceptions, we find that total assets and bok value of equity, as well as variablity of book value and net income, are significantly higher under IAS than HGB. In addition, we find that book value (net income) plays a greater (lesser) valuation role under IAS than under HGB. Finally, we find that while the IAS adjustments to book value are generally value relevant, the adjustments to income are generally value irrelevant. Our evidance provides new insights into the accounting differences between stakeholder-oriented and shareholder-oriented accounting systems and sheds light on the financial statement and valuation implications of adopting IAS in stakeholder-oriented economies, an issue that particularly important in the upcoming adoption of IAS by the European Community.

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Domestic Accounting Standards, International Accounting Standards, and the Predictability of Earnings

By. Hollis Ashbaugh dan Morton Pincus

We investigate (1) whether the variation in accounting standards across national boundaries relative to International Accounting Standards (IAS) has an impact on the ability of financial analysts to forecast non-US firms’ earnings accurately, and (2) whether analyst forecast accuracy changes after firms adopt IAS. IAS are a set of financial reporting policies that typically require increased disclosure and restrict management’s choice of measurement methods relative to the accounting standards of our sample firms’ countries of domicile. We develop indexes of differences in countries’ accounting disclosure and measurement policies relative to IAS, and document that greater differences in accounting standards relative to IAS are significantly and positively associated with the absolute value of analyst earnings forecast errors. Further, we show that analyst forecast accuracy improves after firms adopt IAS. More specifically, after controlling for changes in the market value of equity, changes in analyst following, and changes in the number of news reports, we find that the convergence in firms’ accounting policies brought about by adopting IAS is positively associated with the reduction in analyst forecast errors.

Artikel lengkap dapat didownload disini -> Domestic Accounting Standars and International Accounting Standards

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International Accounting Standards and Accounting Quality

by: Mary Barth, Wayne Landsman dan Mark Lang

We compare characteristics of accounting data for firms that adopt International Accounting Standards (IAS) to a match sample of firms that do not to investigate whether reporting under IAS is associated with predictable differences in accounting quality and cost of capital. After IAS adoption, firms evidance less earnings management, more timely loss recognition, and more value relevance of accounting quality after adoption than before suggesting that IAS adoption is associated with an improvement in accounting quality. While more speculative, our result also provide weak evidance that IAS adoption firms may enjoy lower cost of capital after adoption than non-adoption firms, and a reduction in cost of capital following adoption. Overall, our result suggest an improvement in accounting quality associated with IAS adoption.

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Comparative Value Relevance Among German, U.S. and International Accounting Standards: A German Stock Market Perspective

By: Eli Bartov, Stephen R. Goldberg, Myung-Sun Kim

U.S. Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IAS) compete for Internastional acceptance as reporting standards for capital markets around the world and in the U.S. Currently, the Securities and Exchange Commission (SEC) is considering the quality and acceptability of IAS, and has issued a Concept Release (SEC 2000), seeking advice on this issue. There is, however, only minimal market based evidance on the comparative quality of these two reporting regimes. In this research, we compare the value relevance of earnings produced under three accounting regimes, German GAAP, U.S. GAAP and IAS, by considering the association of stock returns and reported earnings as a mesure of quality of accounting standards.

Artikel Lengkap dapat didownload disini -> comparative-value-relevance.pdf

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International Convergence of Accounting Practices: Choosing Between IAS and US GAAP

by: Ann Tarca


This study examines reporting practise of a sample of foreign listed and domestic-only listed companies from the United Kingdom, France, Germany, Japan, Australia to determine the extent to which companies are voluntarily using “international” standards. Two types of use of non national standards in the accounts presented to the public are considered: adoption of “international” standards instead of national standards, and supplementary use where “international” standards are used in conjuction with national standards. “International” standards are defined as US GAAP or IAS. The study tests for a preference for either set of standards and considers the relationship of chioce of regime with firm attributes.

The result show significant voluntary use of “international” standards in all five countries and among foreign listed and domestic-only listed companies. Companies using “international” standards are likely to be larger, have more foreign revenue and to be listed on one or more foreign stock exchange. US GAAP is the predominant choice, but IAS are used by many firms in Germany and some in Japan. Firms listed in the United States’ regulated market (NYSE and NASDAQ) are more likely to choose US GAAP, but companies traded in the OTC market show considerable support for IAS.

The study demonstrate for managers and regulators that there is considerable support for “international” standards, and that choice of IAS or US GAAP relates to specific firm characteristic which differ according to a firm’s country of origin. Most use of “international” standards reflects individual countries’ institutional frameworks, confirming the key of national regulators and standards setters in assisting companies to achieve more comparable international reporting.

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Artikel ini membahas tentang bagaimana praktek penggunaan standar akuntansi internasional yaitu (IAS dan GAAP US) pada perusahaan-perusahaan yang listing di pasar modal asing dan domestik di lima negara yaitu Inggris, Perancis, Jerman, Jepang dan Australia. Ulasan lengkap dapat dilihat disini -> Ulasan Artikel

Decision Usefulness of Alternative Joint Venture Reporting Methods

Author: Roger C. Graham, Raymond D. King and Cameron K. J. Morrili

Abstract: Depending on the country and circumstances, reporting rules for intercorporate investments may require the cost method, the equity method, proportionate consolidation, or full consolidation, and may yield dramatically different accounting numbers. In the post-Enron environment there is a particular focus on investments for which liabilities remain off balance sheet. We compare the information content of alternative accounting treatments for a sample of Canadian firms reporting joint ventures under proportionate consolidation. We restate their financial statements using the equity method and we compare the information content of the two accounting methods in predicting accounting return on common shareholders’ equity. We find evidence consistent with the view that financial statement prepared under proportionate consolidation provide better predictions of future return on shareholders equity than do financial statements prepare under the equity method. We conclude that, for these firms, proportionate consolidation provides information with greater predictive ability and greater relevance than does the equity method.

Artikel lengkap dapat didownload disini ->  decision-usefulness-of-joint-venture.pdf

Artikel ini membahas tentang prediksi profitabilitas perusahaan dengan membandingan 2 metode pelaporan joint venture yaitu equity method dan proportionate consolidation. Ulasan lengkap artikel ini dapat didownload disini -> decision-usefulness-of-alternative-joint-venture-_ulasan_.pdf

Harmonization of The International Accounting System

Author: Lecturer Ph. Diaconu PAUL


Globalization is one of the biggest social processes which the humanity has facing since ever. That’s why it’s impact in the global economy is huge. Facing a global challenge financial information system has called for consistent financial  information produced by accounting. One of the main international accounting processes on the actual period is the harmonization of the national accounting systems. There are the two main systems which are disputing the firts stage of being the benchmark: GAAP and IFRS. Each of them has his pluses and minuses on being the choused one. Due to this fact the solution for an unique international accounting solution. Is this idea realizable, what steps has been made until now, what should be done in the future. These are the questions on which this papaer is trying to answer.

Keywords: globalization harmonization, convergence, international accounting standards.

Artikel Lengkap dapat di download disini -> harmonization-of-the-international-acc-system.pdf

Artikel ini membahas tentang manfaat dan kendala dari harmonisasi akuntansi internasional, ulasan lengkap artikel ini dapat didownload disini -> Ulasan Artikel

The Impact of International Accounting Standards on Firms

Marjan Petreski


The aim of this paper is to provide some arguments for the effect of the adoption of the International Accounting Standards on firms. Therefore, IAS impact on firms’ management and financial statements are analysed. Provided financial statements intend to support or reject findings in the literature for IAS effect on them.

 Artikel Asli dapat didownload disini -> the-impact-of-ias-on-firms.pdf

Artikel ini mencoba untuk mengungkapkan pengaruh Standar Akuntansi Internasional pada perusahaan baik pada manajemen perusahaan maupun pada laporan keuangan perusahaan. Ulasan artikel ini dapat didownload disini -> the-impact-of-ias-resume.pdf