PERCEPTIONS OF ACCOUNTING PROFESSIONALS ON IFRS APPLICATION AT THE INDIVIDUAL FINANCIAL STATEMENTS: EVIDENCE FROM ROMANIA

Marian Socoliuc

14 citations0/0 files storedRePEc: Research Papers in Economics

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Accounting Theory and Financial Reporting Auditing, Earnings Management, Governance Accounting and Financial Management

Abstract

For the accounting year 2012 companies whose securities are listed on Bucharest Stock Exchange are required to present their individual financial statements in conformity with IFRS by restating the information prepared in compliance with national regulations. Moreover, starting 1st January 2013, these companies are applying IFRS as the basis of accounting. A peculiarity of this transition process is that listed entities were not required to present two sets of accounts before switching to IFRS (as it was the case for financial institutions). As we considered that the attitude of main stakeholders involved in the process is a precondition for high quality IFRS financial statements, the objective of our study was to illustrate the opinion of accounting professionals on this decision. The study surveys 142 accounting professionals who, throughout years 2012 and 2013, have attended the continuing training courses organized by the Body of Expert and Licensed Accountants of Romania. We identified that respondents are aware of the benefits of IFRS application, 79.6% of indicating that the companies listed on the BSE should have applied IFRS to the preparation of individual financial statements, even if they had not been required to do so. However, 69.7% of them believed that the application of IFRS should have been concurrent, in an initial stage, with the application of national regulations before proceeding with the application of IFRS as the basis of accounting. Furthermore, they perceive the fiscal risk as the greatest difficulty in the transition to IFRS. The most important benefit is the increased attractiveness to investors, while adapting the IT systems is considered the most significant cost. Overall, 63% of the respondents have indicated that the benefits of applying IFRS outweigh the costs.

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2008International Accounting Standards and Accounting Quality 2010Does Mandatory Adoption of International Financial Reporting Standards in the European Union Reduce the Cost of Equity Capital?2008Do accounting standards matter? An exploratory analysis of earnings management before and after IFRS adoption 2015Incentives or Standards: What Determines Accounting Quality Changes around IFRS Adoption?2006Economic Benefits of Adopting IFRS or US‐GAAP – Have the Expected Cost of Equity Capital Really Decreased?2006Implementing IFRS from the perspective of EU publicly traded companies 2010International Financial Reporting Standards and the quality of financial statement information 2009The Development of Accounting Quality of IAS and IFRS over Time: The Case of Germany

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