Abstract
International comparability of financial statements under IFRS can only be achieved if standards are interpreted and applied consistently across countries. However, the different institutional and cultural environments of various countries in which companies operate and in which individuals make accounting decisions suggest that application of IFRS may differ. Building on previous studies that ...
Abstract
International comparability of financial statements under IFRS can only be achieved if standards are interpreted and applied consistently across countries. However, the different institutional and cultural environments of various countries in which companies operate and in which individuals make accounting decisions suggest that application of IFRS may differ. Building on previous studies that found evidence for this in the area of explicit options under IFRS, we examine the use of discretion in interpretations and accounting estimates by surveying German and British accountants, asking them to account for identical cases under IFRS. The results of this test provide only some evidence for international differences in accountants' judgments. This suggests that the national environment might be less relevant in those fields of room for maneuver in the application of IFRS. However, we find considerable variability of responses within jurisdictions and therefore further conclude that differences in personal characteristics might be more important than cultural factors.
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