Should codification emerge in IFRS? does form of regulation matter?

Abstract

The International Financial Reporting Standards (IFRS) is in the process of becoming globally recognized in stock exchanges alongside the Generally Accepted Accounting Principles in the United States (US GAAP). The IFRS and US GAAP have evolved based on the GAAP encompassed by the list of standards that constitute the structure of both accounting literatures. The structure that this article refers to as "standard-based" has been a traditional format for the IFRS and US GAAP in the past. Whereas the IFRS still maintains a standard-based literature structure, US GAAP standard setters of the Financial Accounting Standards Board (FASB) decided to depart from the standard-based tradition of editing accounting literature by redesigning the existing authoritative US GAAP literature into a single codified text, titled the Accounting Standards Codification (ASC). This paper focused on the structures of IFRS and US GAAP to understand whether the ASC enhances the application of US GAAP by professionals. The objective of this paper was to determine whether the structure of the ASC offers an appropriate alternative to the standard-based structure of IFRS - making IFRS a user-friendly accounting literature in Central Europe. We administered a survey as a tool to foster discussion and to identify the features offered by the ASC, which is similar in structure to statutory accounting traditionally adopted in Central Europe.