Jurnal Umum
Will Harmonizing Accounting Standards Really Harmonize Accounting? Evidence from Non-U.S. Firms Adopting U.S. GAAP
International harmonization of accounting standards appears to be inevitable.
However, little evidence exists regarding whether harmonizing
accounting standards will result in actual harmonization of accounting
practices. Using a sample of non-U.S. firms that adopt U.S. Generally
Accepted Accounting Principles (GAAP) to provide evidence on this
issue, we find that most firms that adopt U.S. GAAP adjust their
accounting methods to those required by U.S. GAAP. Properties of the
firms’ accounting numbers also change significantly after adopting U.S.
GAAP, but they do not fully converge toward that of U.S. firms. In the
cross-section, regulatory oversight is associated with more successful
implementation of U.S. GAAP; firm-specific capital market incentives
are not. These results suggest that harmonizing accounting standards
may result in more comparable accounting methods and numbers, but
that effective regulatory oversight will be important in reaching this
outcome.
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