Paradoxes and Issues of the Globalisation of Accounting

  • Nadine Tournois
  • Robert Teller
Chapter

Abstract

Financial globalisation goes along with a strong change of the globalisation of accounting. This situation can be explained by several phenomena:1

  • A multiplication of financial scandals (the Enron affair and WorldCom, for example) undermined the confidence of financial markets and led to a wave of reactions aimed at improving financial and accounting-information transparency.

  • Europe’s decision to make the International Financial Reporting Standards (IFRS) the mandatory standards for all listed companies.

  • The accelerated power climb of the IFRS (resulting from this decision), which have now been implemented (or are being implemented) in more than 125 countries worldwide (Deloitte, Iasplus.com).

  • The convergence process, engaged by Norwalk agreements between IFRS referential and the American standards Generally Accepted Accounting Principles (US GAAP), which is producing tangible results, especially regarding financial instruments, segment reporting and the restructuring of the Income Statement.

Following the Enron affair, the report prepared by the Economic Analysis Council for the French prime minister, pointed out the contradiction between the fast capital markets’ globalisation and the fragmentation of national systems governing accounting and financial information. For companies operating in different countries and listed on different markets, ‘… this disparity of standards is at least, a cost, and at worst, a source of confusion in their communication strategy; for investors it is a factor of opacity which handicaps comparisons and represents an obstacle to mobility, and therefore to the proper capital allocation’ (De Boissieu et al., 2003).

Keywords

European Union Accounting Standard International Financial Reporting Stan Financial Account Standard Board International Account Standard 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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References

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Further reading

  1. Colasse, B. (2005) ‘La régulation comptable entre public et privé’ in M. Capron, È. Chiapello, B. Colasse, M. Mangenot and J. Richard (eds) Les normes comptables internationales, instrument du capitalisme financier. Paris: La Découverte.Google Scholar
  2. Ernst and Young (2005) Passage aux IFRS: les pratiques des grands groupes européens. Paris: CPA.Google Scholar
  3. Gornick-Tomaszewski, S. and McCarthy, I.N. (2003) Cooperation between FASB and IASB to achieve convergence of accounting standards. Review of Business, Spring: 52–61.Google Scholar
  4. Hoarau, C. and Teller, R. (2005) ‘Information financière et responsabilité sociale des entreprises’ in Mélanges en l’honneur de Roland Pérez, La responsabilité sociale de l’entreprise. Colombelles: Edition EMS.Google Scholar
  5. Mullenbach, J.L. (2008) La crise financière cache-t-elle une crise des norms comptables? Les Echos, 30 January.Google Scholar
  6. ONU (2005) Commission on Investment, Technology and Related Financial Issues, Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting. (22nd session), November, Geneva.Google Scholar
  7. Teller, R. (1998) Un modèle comptable de la valeur peut-il restaurer la valeur du modèle comptable? Valeur, marché et organisation. Nantes: Actes des XIVèmes Journées des IAE.Google Scholar
  8. Tweedie, D. (2007) Simplifying global accounting: IASB Chair discusses the future of IFRS, U.S. GAAP and the global accounting profession. Journal of Accountancy, September: 56–60.Google Scholar

Copyright information

© Nadine Tournois and Robert Teller 2010

Authors and Affiliations

  • Nadine Tournois
  • Robert Teller

There are no affiliations available

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