Quantifying the Compatibility Degree between Financial Reporting Systems. The Case of some Eastern European Countries
Author:
Master Student Cristina LUPȘAN, Associate Prof. Răzvan V. MUSTAȚĂ, Ph. D.
JEL:
M41
DOI:
Keywords:
accounting harmonization, accounting practices, Eastern European countries, financial statements, tangible assets’ revaluation, IFRS
Abstract:
In the context of market globalization, it is generally accepted that IFRS (International Financial Reporting Standards) represent the global accounting regulations with the purpose of increasing the comparability and transparency of accounting information in the financial statements, leading to a common accounting language at a global level and a decrease in the cost of information. This study presents the main issues regarding the implementation of IFRS by entities publicly traded (listed entities) in three Eastern European countries: Romania, Bulgaria and Republic of Moldova; the authors also aimed to highlight and analyze the conformity of the national regulations with the International Financial Reporting Standards. In this sense they developed an empirical study which emphasizes the point of view of the Eastern European countries on the development process of harmonizing the financial reports and the national accounting practices with the International Financial Reporting Standards. More precisely, the paper focuses on the reevaluation process which the authors consider essential in reaching a faithful representation through the financial reporting process. The study also tested potential determinants (such as the activity domain, the profit/loss for the period, the total of the tangible assets or the auditor type) of how the reevaluation process is approached in financial reporting. As a result, authors concluded that none of the factors taken into account influence significantly disclosure regarding the tangible assets’ reevaluation within the financial statements, in accordance with the requirements of IFRS. On the other hand, the study documented insights regarding the efforts of the Eastern European countries with regards to improving the financial reporting process and decreasing information asymmetry. \r\n\r\n