International Financial Reporting
Convergence: Evidence from Three
Continental European Countries
PASCALE DELVAILLE, GABI EBBERS AND CHIARA
ESCP-EAP, Paris, France, Allianz AG, Mu¨nchen, Germany and †Universita` Ca’ Foscari di Venezia, Venezia, Italy
ABSTRACT Listed companies in the European Union are required to apply International Financial Reporting Standards (IFRS) in their consolidated accounts as of 1 January 2005. The purpose of this paper is to compare developments in France, Germany and Italy and the approaches to integrate the current European accounting reform processes with IFRS. The paper evaluates the adaptation of national accounting systems with respect to institutional and regulatory changes on the one hand and financial reporting changes on the other.
Accounting regulation in Europe is undergoing a period of major changes. The introduction of International Financial Reporting Standards (IFRS) for financial reporting has added further impetus to the goal of convergence of international accounting rules. Since 1 January 2005, more than 7,000 listed companies are required to prepare their consolidated accounts using IFRS. Pressures to integrate capital markets in Europe have prompted the European Commission to introduce uniform financial reporting standards for listed EU companies (van Hulle, 2003). Recognising the advantages of international financial reporting harmonisation for EU companies with listings outside the EU and admitting that no European Accounting in Europe, Vol. 2, 2005
Correspondence Address: Pascale Delvaille, ESCP-EAP, 79 avenue de la Re´publique, 75543 Paris, Cedex 11, France. E-mail: email@example.com; Gabi Ebbers, Allianz AG, Ko¨niginstr. 28, 80802 Mu¨nchen, Germany. E-mail: Gabi.Ebbers@Allianz.de; Chiara Saccon, Universita` Ca’ Foscari di Venezia, Dipartimento di Economia e Direzione Aziendale, San Giobbe – 30123 Venezia, Italy. E-mail: firstname.lastname@example.org
0963-8180 Print=05=010137–28 # 2005 European Accounting Association Published for the European Accounting Association by Taylor & Francis DOI: 10.1080=09638180500379103
Downloaded by [Macquarie University] at 05:59 12 October 2014 accounting standards could be used for this purpose, IFRS were introduced as mandatory standards (van Hellemann and Slomp, 2002). The legal instrument of an EU Regulation (No. 1606/2002)1 was adopted by the European Commission in order to have a direct effect on listed companies. However, member state options were permitted for the application of IFRS in individual company accounts and in the consolidated accounts of non-listed companies. When comparing developments and the approaches used to integrate current accounting reforms in France, Germany and Italy, it becomes evident, that although the internationalisation process of financial reporting has accelerated considerably in these countries in recent years, the impacts are different and the processes vary in speed in each of the countries.
Research in comparative international accounting developed a contingency perspective on accounting system differences which suggests that accounting is influenced by its environment (Hopwood, 1991). Among the factors that are suggested as influencing financial reporting, comparative studies usually refer to the capital market and the role of finance, the impact of the state and the role of the accounting profession as well as the influence of commercial and tax law. Taking these different factors into account contingency studies suggest systematic differences in national accounting frameworks and, for Europe, typically distinguish the Anglo-Saxon from Continental Europe group (Nobes and Parker, 2000). Whilst the Anglo-Saxon group is characterised by a capital market and shareholder orientation with a strong accountancy profession, the Continental Europe group is characterised by a tax and legal orientation and creditor protection.
The countries selected for this paper are...
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