International accounting frameworks: The convergence of corporate financial statements

Abstract

Globalization and the gradual opening of financial frontiers have acted as an imperative in having homogeneity in the reporting frameworks and the financial statements of the entities in public and private sectors both nationally and internationally. The on-going global financial crisis, as well as the lack of investors’ confidence in stock markets, has increased the necessity of a common approach in accounting standards. Certified Public Accountants (CPA’s) from 7 different European countries took part in the present study, whose purpose was to identify the main differences between the two most used accounting standards, the IFRS and the US GAAP. Quantitative research revealed that there are differences in both the balance sheet presentation of debt and classification of D. Tax assets/liabilities, as well as the presentation of extraordinary items in the income statements. The research concludes the developments and the governance of existing reporting frameworks over the last decade, from which conclusions are drawn, and future studies towards the convergence are suggested