ABSTRACT
The purpose of this chapter is to discuss the problems involved in the measurement of the concepts of ‘harmonization’ and ‘standardization’. We do this by analysing six recent empirical attempts to measure those concepts in the context of international accounting. These harmonization measurement studies may differ from studies which appraise the extent of disclosure in company accounts (e.g. Singhvi and Desai 1971; Buzby 1974; Barrett 1976). Such disclosure studies are ultimately concerned with the quality of information contained in company accounts. Harmonization measurement studies are, more simply, concerned with the similarity or otherwise of accounting practices and regulations. Table 24.1 summarizes the six studies in terms of their objectives, the data sources used, the countries surveyed, their general methodology, the statistical methods employed and their main conclusions. These studies used different data sources and methodologies and, perhaps unsurprisingly, arrived at somewhat different conclusions. Measurement studies surveyed
|
Nair and Frank (1981) |
Evans and Taylor (1982) |
McKinnon and Janell (1984) |
Doupnik and Taylor (1985) |
Nobes (1987b) |
van der Tas (1988) |
|
|---|---|---|---|---|---|---|
|
Objectives |
To assess the success of ‘formal’ harmonization efforts by the IASC |
‘To determine the impact of IASC standards on the financial reporting in member nations’ (p. 119) |
To analyse the direct and indirect influence of the IASC on accounting standards and requirements |
To assess conformity of Western European countries to a ‘basic core of accounting practice’ (p. 27), and changes in conformity over time |
To test the hypothesis that US and UK companies do not obey IASC standards |
To quantify harmony and to determine when and to what extent harmonization has taken place, and the impact of standard-setting bodies |
|
Countries surveyed |
37 countries common to the three PW surveys |
France, Japan, UK, USA and West Germany |
64 countries covered by the 1979 PW survey |
16 Western European countries |
The UK and the USA |
The Netherlands, the UK and the USA |
|
Scope |
IASs 1–10 |
IASs 2-4, 6 and 7 |
IASs 3 and 4, ED 11 (IAS 21) |
IASs 1-8 |
IASs 3, 4 and 22 (USA) and IASs 9, 14 and 19 (UK) |
Accounting for deferred tax and investment tax credit; valuation of land and buildings |
|
Data sources |
PW surveys 1973, 1975 and 1979 |
Nine to ten financial reports from each country surveyed, for the period 1975-88 |
PW 1979 survey |
PW 1979 survey and own questionnaire |
Published 1985 accounts for separate random samples of listed companies |
National surveys |
|
Methodology |
Changes in the distribution of countries among requirement categories tested for significance with Friedman’s ANOVA |
Reports examined for evidence of compliance with IASs. Results given as percentage compliance rates per country for each year |
Descriptive analysis of accounting regulations of IASC members. Discussion of IASC influence on ASC and FASB statements on foreign exchange translation |
Response categories weighted. Average scores calculated for regions and countries. Non-parametric tests used to differentiate regions and groups |
Differences of content or timing identified between national standards and IASs. Compliance rates inspected for signs of obedience to IASs |
Three indices developed to measure harmony and comparability, used for different countries. Changes in values related to legal and professional regulation |
|
Main conclusions |
‘The period of the IASC’s existence has coincided with a growing harmonization of accounting standards’ (p. 77) |
‘The IASC has had very little impact on the accounting practices of the countries surveyed’ (p. 126) |
‘The IASC has not succeeded in changing existing standards or setting new standards’ (p. 33) |
‘Much diversity continues … to exist among the countries of Western Europe’ (p. 33) |
That ‘IASs are not obeyed may be accepted’ (p. 13) |
‘It is possible to measure the influence of mandatory and non-mandatory provisions’ (p. 167) |
