Question

READ AND SUMMARIZE THE FINDINGS ABOUT THE DIFFERENCES OF IFRS AMONG COUNTRIES:

We present an index that can be used to distinguish between countries according to their institutional setting for the audit of financial statements and the enforcement of

compliance with accounting standards. The pursuit of comparable financial reporting and adoption of IFRS has highlighted differences in institutional setting between

countries that may influence the quality of IFRS reporting (Ball, 2006; Brown, 2011). The role of audit and accounting enforcement is arguably crucial to the application

of IFRS. The IFRS Foundation’s staff has supported calls by the World Bank for an international infrastructure to support the application of IFRS, emphasising that accounting quality is not a function of accounting standards alone (Hegarty et al., 2004;IASB, 2012). With the development of cross-country IFRS studies, researchers need

effective proxies to control for differences between countries in their institutional setting.

Our index represents a first attempt at ranking countries specifically on factors affecting the strength of audit and the level of enforcement activities relating to We present an index that can be used to distinguish between countries according to their institutional setting for the audit of financial statements and the enforcement of compliance with accounting standards. The pursuit of comparable financial reporting and adoption of IFRS has highlighted differences in institutional setting between countries that may influence the quality of IFRS reporting (Ball, 2006; Brown, 2011).

The role of audit and accounting enforcement is arguably crucial to the application of IFRS. The IFRS Foundation’s staff has supported calls by the World Bank for an

international infrastructure to support the application of IFRS, emphasising that accounting quality is not a function of accounting standards alone (Hegarty et al., 2004;IASB, 2012). With the development of cross-country IFRS studies, researchers need effective proxies to control for differences between countries in their institutional setting.

Our index represents a first attempt at ranking countries specifically on factors affecting the strength of audit and the level of enforcement activities relating to 16 has double the enforcement activity of a country scoring 8, although that is the literal interpretation of the numbers. Our aim is to provide a ranking of countries on enforcement in 3 years, using the index numbers to do so. At best, we can show how countries are positioned relative to their peers and how their position has changed over the study period. Nevertheless, our index improves on other indices by capturing, directly, differences between countries in their audit environments and enforcement of financial reporting requirements during a watershed period. Preliminary analysis supports this view.

There are many research opportunities to employ the index we present. For example, studies continue to address important questions about the consequences of adopting IFRS, often by considering the effect of the change of standards on the quality of financial statements or capital market outcomes. As another example, our index should be useful when the design of a study requires a measure of differences in the likelihood a country is monitoring compliance with accounting standards,including IFRS, and taking action on cases of non-compliance

Answer 1

There has been an index which distinguish institutional setting of countries for the audit of financials statements and alignment of thier compliances as per the accounting standard. Quality of IFRS reporting can be hampered by the differences in institutional settings.which was necessary for the pursuit of comparable financials reporting and adoption of IFRS. IFRS foundation staff has been in constant urge with World Bank for international infrastructure to support the application of IFRS. It has been emphasised that accounting quality is not only a function of accounting standards. With the development of cross-country IFRS studies, there has been a constant need for proxies to control for differences between countries in institutional settings.

Index represents a first attempt at ranking countries specifically on factors affecting the strength of audit and the level of enforcement activities relating to 16 has double the enforcement activity of a country scoring 8, although that is the literal interpretation of the numbers. Aim to provide a ranking of countries on enforcement in 3 years, using the index numbers can be achieved. This can show how countries are positioned relative to their peers and how their position has changed over the study period. Nevertheless, index has been improved on other indices by capturing, directly, differences between countries in their audit environments and enforcement of financial reporting requirements during a watershed period. Preliminary analysis supports this view.

There are many research opportunities to employ the index to present. For example, studies continue to address important questions about the consequences of adopting IFRS, often by considering the effect of the change of standards on the quality of financial statements or capital market outcomes.