Financial reporting paradigms for financial instruments: Empirical study on the Czech and Romanian regulations

Abstract

Purpose

It is well known that once regulatory bodies adopt a financial reporting paradigm, it becomes the guiding principle for accounting regulation. This paradigm itself in the field of accounting represents the starting point of the research. The purpose of this paper is to focus on the specific case of the Czech Republic and Romania, namely on aspects concerning regulations in the field of financial instruments.

Design/methodology/approach

The authors have approached an a priori economic analysis of national regulations in correlation with international standards inferences. In doing so, they have identified several key issues, which need to be discussed when thoroughly analyzing accounting regulations for financial instruments. Furthermore, the authors have used statistical indicators in order to determine the degree of similarities and dissimilarities between the two national accounting systems and also in correspondence with the international referential.

Findings

The results of the performed analysis show a high level of similarities between the two national set of GAAPs and IFRS/IAS, and also among the two of them, still both of them being closer to the international referential than to each other. Research limitations/implications – The paper only approaches formal harmonization in the area of reporting for financial instruments. Moreover, those issues analyzed through the regulations' perspective need to be closely quantified in matters of their actual implementation, pertinent conclusions and correlations being then made regarding the status of each country within the global capital market.

Practical implications

The paper represents a first step within the intended scientific démarche, a priori research having the attribute of generating feedback on hypothetical reporting alternatives prior to implementation.

Originality/value

This parallel analysis performed on the two national accounting systems from the financial instruments' point of view finds results, which are explained through the bonding theory.

Citation

Giorgiana Bonaci, C., Matiş, D. and Strouhal, J. (2008), "Financial reporting paradigms for financial instruments: Empirical study on the Czech and Romanian regulations", Journal of International Trade Law and Policy, Vol. 7 No. 2, pp. 101-122. https://doi.org/10.1108/14770020810927318