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The purpose of this study is to identify the professional skills and competencies of accountants that support a successful implementation of International Financial Reporting Standards (IFRS). The authors further investigate the extent to which professional accountants have developed these skills through professional training.

In the survey, Indonesian accountants were provided with a list of 47 skill items under nine categories of professional skills and were asked to rate the importance of each skill item and to indicate the level of priority given to the development of the skill items in the professional training they have undertaken. Their responses provide insights into the skills needed for applying IFRS and the adequacy of professional training in providing these skills.

The authors find that accounting judgement is considered to be the most necessary skill for applying IFRS. Likewise, the findings show that ethical skills and certain generic skills are also perceived to be necessary for adequate application of IFRS, while skills relating to cultural sensitivity are viewed as least important. The findings further demonstrate that professional training programmes need to emphasise the development of judgement and other relevant skills that are important skill categories for applying IFRS.

This study extends the literature on IFRS implementation through a specific focus on the professional skills required by accountants.

These findings have important policy implications for the standard-setters, regulators, auditors and to professional training providers across the world, such as professional accounting associations, accounting firms and educational institutions, for evaluating the content of the training and education programmes being delivered to accountants to prepare them with the relevant skills for applying IFRS.

This study is one of the first to examine the importance of various types of skills necessary for accountants in applying IFRS and the extent to which these skills have been developed through the professional accounting training provided.

This paper aims to conduct an experiment that investigates the effect of the ambiguity present in international financial reporting standards (IFRS) on the judgments of auditors. This paper also examine the effects of the personality trait of ambiguity tolerance on judgments of auditors.

This paper conduct an experiment in which experienced Australian-based auditors are placed in hypothetical revenue recognition and lease classification decision contexts. The participants are members of the Australian accounting profession who are familiar with applying IFRS.

This paper find support for the perception that when the relevant IFRS are more ambiguous, auditors make less aggressive reporting judgments compared to when the IFRS are less ambiguous. The results also unveil a novel finding that auditors who are more tolerant of ambiguity are likely to choose the accounting treatment that best reflects the economic substance of a transaction when interpreting IFRS compared to those who are less tolerant of ambiguity.

These results would be of interest to policymakers and accounting researchers as they continue to contemplate a shift to more principles-based IFRS.

To the best of the authors’ knowledge, this study is the first to examine the influence of an individual’s ambiguity tolerance on financial reporting quality in jurisdictions that have adopted IFRS.

The International Accounting Standards Board (IASB) has justified the simplification of International Financial Reporting Standards (IFRS) for small- and medium-sized enterprises (SMEs) in several ways, but no effective justification for this simplification has been made based on the information needs of users. This study aims to provide empirical evidence of the decision usefulness of IFRS for SMEs from a prominent user group of SME financial statements – the banks.

This study uses a mixed-method approach. First, a survey was conducted on commercial bank lending officers to assess the usefulness of different disclosure items included in the SME financial statements. Second, semi-structured interviews were conducted with commercial bank lending officers to gain an in-depth insight into the appropriateness and economic consequences of the requirements of IFRS for SMEs on their lending decisions.

The findings show that commercial bank lending officers did not consider all the disclosure requirements presented to them to be equally important. Hence, to facilitate the actual needs of the users’ decision usefulness, it is imperative that when given the opportunity, users participate in the development of accounting standards.

The findings of this study will be of interest to accounting regulators for evaluating the successful implementation of IFRS for SMEs and planning the next review of IFRS for SMEs. The IASB and SME Implementation Group are presently considering ways to increase user involvement for the next review of IFRS for SMEs, and the findings of this study signify the need for user involvement in the standard setting process.

This paper aims to address a topical and controversial issue, namely, the degree of conformity with the new auditor reporting requirements in Australia and the extent of variations in the reporting of key audit matters (KAMs) by Australian firms.

This paper compares the 64 elements identified in the applicable standards with the auditor’s report from the sampled companies to determine the degree to which the top 200 firms listed on the Australian Stock Exchange are complying with the requirements of the new audit report. This paper investigates KAM disclosures within and across industries.

The results indicate that there is a high degree of conformity with the new reporting framework, yet significant variations in the contents of the report, particularly in KAM disclosures. This paper observes that the number of KAMs and their extent of disclosure generally varies within industries. The types of KAMs presented vary both within and across industries. This paper further provides evidence that auditors have a tendency of not disclosing negative KAMs and tend to avoid negative wordings when describing KAMs. This paper also finds that there are significant differences in the placement of various types of KAMs in the audit report.

These findings have important policy implications for the standard-setters, regulators, auditors and users of financial reports on the adequacy of the new auditor reporting framework.

This study is one of the first to examine the degree of conformity with the new audit reporting model in Australia.

The purpose of this paper is to examine the effects of a principles-based accounting standard with guidance (principles-with-guidance approach), stringency (conservativeness) of numerical thresholds, and incentives (high or low debt-equity ratio environment) on the judgments of Japanese auditors in a lease accounting setting.

To reflect Japanese auditors’ judgmental features, this study adopts a quasi-experiment that uses both manipulation for different environments (i.e. stable or critical financial condition) and perceptions about the importance of “principles” and “guidance” in different types of lease accounting standards (i.e. substantially all, approximately 90 and 88 percent).

“Principle” (substantially all) has a positive effect, while “guidance” (approximately 90 percent) has a negative effect on encouraging Japanese auditors to capitalize lease transactions. “More stringent guidance” (approximately 88 percent) has a positive effect only when clients are in critical financial conditions. Other findings indicate that judgments of Japanese auditors are strongly influenced by their colleagues’ perceived judgments.

This is the first quasi-experiment to examine Japanese auditors’ professional judgments using a lease accounting setting. To find out whether Japanese auditors interpret and apply International Financial Reporting Standards (IFRS) in the similar manner as their counterparts in other countries will be important when Japanese policymakers make their final decision regarding the adoption of IFRS. The discussion and findings also contribute to the International Accounting Standards Board (IASB) with regard to enhancing global convergence of financial reporting.

Parmod Chand, PhD (Macquarie) is a senior lecturer in the Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia. He has also held teaching positions at the University of the South Pacific, Fiji. He has published in a variety of professional and refereed journals, including the European Accounting Review, Advances in Accounting, Incorporating Advances in International Accounting, Critical Perspectives on Accounting, and Australian Accounting Review. He is also involved in various consulting activities for the professional body in Fiji.

We have considered both the de jure and de facto aspects of comparability in financial reporting. Generally, the findings presented in this monograph show that there is a lack of both de jure and de facto comparability in financial reporting across countries. We have considered the de jure aspect of comparability in financial reporting by identifying the ways in which IFRS are adopted and enforced in the South Pacific region and also investigated the relationship between country-specific characteristics and the selection of the appropriate approach for adoption. An examination of the convergence process in the South Pacific region provides evidence that countries use different approaches in their adoption of IFRS. We have broadly identified five different approaches for convergence and harmonization of accounting standards, ranging from adoption of IFRS in their entirety to the lack of reference to IFRS, that is, no convergence or harmonization.

The forces of globalization and political expediency are forcing an increasing number of countries to adopt International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Although numerous countries are adopting IFRS, the approaches used for convergence continue to differ significantly across countries. Using selected countries from the South Pacific region, this chapter investigates the relationship between country-specific characteristics and the selection of the appropriate approach for the adoption of IFRS. The country-specific attributes that have been found to influence convergence are (1) the set of accounting standards that prevailed in the country at the time the selection was made, (2) the availability and experience of professional accountants, (3) the relevant educational and professional training, (4) the presence of the Big 4 accounting firms, and (5) the accounting regulatory framework. The results of this study suggest that complete comparability in financial reporting may be difficult to achieve across all countries in the region even after adopting the IFRS because of differences in country-specific factors. These findings are important because they indicate that attention should be concentrated on theorizing and empirically testing the effects of country-specific attributes on convergence efforts across jurisdictions.