Difficulties Faced by Emerging Asian Countries in Convergence to IFRS with the

Enduring Differences in Cultural Values

Abstract
Purpose: This article aims to compare the influence of values and cultural differences in
the accounting standards set by the International Financial Reporting Standards (IFRS).
This includes the disparities and similarities between Generally Accepted Accounting
Principles (GAAP) and IFRS as far as cost of auditing ethics, taxation policies, pay roll
up keeping, and bookkeeping methods. This article will also bring to light the challenges
that emerging countries in Asia have with the implementation of setting higher standards
of accounting in order to conduct day to day business. Research shows these new
standards tend to have a negative effect on businesses in their earlier seed stage and
explanation stage of the business cycle. More importantly the following article will
highlight the challenges that businesses go through in order to meet all the requirements
and standards on their journey towards complete globalization. Finally our comparison
will go into depth to view the work practices for accountants in both the U.S and Asian
countries.
Methodology: The data for this research were collected using the Hofstedes model,
which shows the significant differences between cultural values of the people in U.S,
China, and Japan. This literature go into depth to provide historical background of IFRS,
which will then be compared to the domestic accounting standards of U.S, China, and
Japan respectively.

Findings: This literature highlights the difficulties faced by emerging countries to

converge the existing accounting standards with IFRS. It also proves that the long-term
benefit obtained through the convergence with IFRS for the emerging economies is high
even though the one time cost for implementation is large. In addition, it also compares
the cultural values of people in U.S with China and Japan using Hofstedes dimensions,
which shows that U.S has low power distance compared to that of China and Japan, but
high individualism.
Originality: This paper enlightens the differences in the principles used under different
accounting standards as far as measurement principle, revenue recognition principle and
inventory valuation goes.
Keywords: IFRS, Auditing, Globalization, practices, emerging countries
Paper type: Research Paper

Introduction
Accounting Standards controls mostly every aspect of the businesses; the troubles faced
by companies in emerging Asian countries are whether to go with the existing standards
practiced by developed countries like U.S.A or to create their own. Thats when the
International Reporting Standards for Accounting Standards (IFRS) comes into effect
because it helps setting uniform standards over all the countries. Not every country uses
IFRS some countries have taken the idea of IRFS and created their own. This article aims
to compare the differences and show the similarities among these work practices and
accounting ethics prevailed in most Asian countries and the U.S. This literature will lead
in the favor of investors having more and more demand of uniformity in accounting
standards caused by globalization. However, it also takes into consideration the steps
taken by the Asian countries and U.S towards the path of converging with IFRS.

Evolution of IFRS
The importance of harmonization of accounting standards was felt with the establishment
of International Accounting Standards Committee (IASC) in 1973, which published a
single set of accounting standards (Moser, 2014). A study group consisting of members
from Canada, the UK, and the USA formed the IASC (Moser, 2014). One of the major
goals was to issue international standards of reference that would guide the convergence
of national standards over time(Moser, 2014). The route towards the harmonization of
accounting standards wasnt the easiest one, but with the involvement of Stakeholders
including the World Bank, the United Nations (UN) and the Organization for Economic
Cooperation and Development made it stronger. Along with IASC, the Financial
Accounting Standard Board (FASB), Securities and Exchange Commission (SEC) and
the US Congress also got involved with the mission to publish international accounting
standards (Moser, 2014). Despite the early successes from the implementation of new
standards, IASC failed to agree on a conceptual framework that met user needs and this
failure was worsen by poor governance and political pressures (Moser, 2014). To
overcome the failure of IASC, Standing Interpretations Committee (SIC) was formed in
1997, which acted as an interpretive body for the IASC (Moser, 2014). However, there
were still areas where things were unclear and lacked coverage, with those challenges to
be removed, the IASC evolved into the International Accounting Standards Board
(IASB), which was incorporated in Delaware, USA in 2001 (Moser, 2014). After the
introduction of IASB, the existing IAS and SIC standards didnt last long with the IASB
redefining and revising the previously issued IAS with 13 new standards that are referred
to as IFRS (Moser, 2014).

All of the 13 new standards were implemented using a principle-based structure

that provided these standards with the necessary flexibility to be applied at a global
context (Moser, 2014). It helped more than 50 countries including the EU countries to
mandate IFRS for all listed companies in their jurisdiction (Ramanna & Sletten, 2014).
The period between 2003 through 2008 was the time when IFRS got flourished to most
countries because some of the companies voluntarily adopted IFRS (Ramanna & Sletten,
2014). The transition over to the IASB using the IFRS saw major improvements in
adoption and convergence worldwide (Moser, 2014). In 2002, US GAAP and IASB
signed a Norwalk agreement, which aims to reduce the disparities between the two
( Steinbach & Tang, 2014). An even larger advancement came when the group of 15
countries introduced convergence projects with IFRS through 2008, which included
some of the worlds largest economies such as China and the U.S. (Ramanna & Sletten,
2014).
Timeline Event (Baudot, 2014)
Standardization
1973

Establishment of FASB and IASC

1974

FASB Conceptual Framework

1977

Establishment of IFAC (of which AICP, founded 1936 is a member)

1983

Establishment of IOSCO (of which SEC, founded 1933 is a member)

1989

IASC Conceptual Framework

1989

IASC-IOSCO Agreement: Comparability and Improvement Project, Opening of

IASC standard-setting process to public

Harmonization
1992

Establishment of G4 Working Group

1993

IASC-IOSCO Agreement, IAS to be accepted for foreign listings following

harmonization of IAS
1995

EC Accounting Harmonization Strategy, EC Directive COM 95(508) Accounting

IAS in lieu of local GAAP

1998

IASC-IOSCO Modernization Agreement

FASB Discussion Paper: International Accounting Standard-Setting

2000

IOSCO formally accepts IAS as basis for foreign listings

2001

Establishment of IFRS Foundation and FASB, replacing IASC, IASB standards to

be issued as IFRS

2002

EC Single Market Proposal, EC Directive COM 2000(359), Policy supporting use

of one set of standards facilitating creation of single capital market in EU

Convergence

2002

FASB-IASB Norwalk Agreement

2005

Mandatory application of IFRS for publicly listed EU companies

2006

FASB-IASB Memorandum of Understanding 2006-2008

2007

US SEC lifts Form 20-F reconciliation requirement for cross-listed companies,

accepts IFRS as issued by IASB

2008

G20 Summit Leaders call for single set of high-quality accounting standards

2008

US SEC publishes Roadmap to IFRS Conversion

2008

New Appointment of Commissioner of US SEC

2009

Monitoring Board of public capital authorities installed

2009

FASB-IASB Memorandum of Understanding 2009-2011

2010

FASB-IASB Joint Decision to Delay Convergence Projects

2010

G20 Reaffirm Support for Single set of Standards

2011

SEC Workplan for IFRS (Condorsement)

2011

Turnover of first IASB Chairman, Sir David Tweedie

Benefits of convergence

Convergence in standard-setting is a process of accounting change, which involves the

study of how the change unfolds and focuses on the series of events or activities that
surrounds a process and uncovering the relationship (Baudot,2014). Many countries saw
the long-term benefits from the implementation of single set of accounting standards, but
they didnt realize the cost of implementation until they began their first step
(Chakrabarty,K). While the one time cost of switching to IFRS was expensive, it would
significantly lower the recurring cost of preparing financial statements under multiple
accounting standards (Moser, 2014). More importantly with the globalization many
companies realized that having investors to invest and have different sets of accounting
standards than they would normally prefer was not helping for their good. So, with this in
mind many companies voluntarily started using the new sets of standards (Chakrabarty,
K). The convergence to the IFRS helped global companies to compare the financial
statement of other competitors no matter what part of the world that company is in.
Furthermore, it also helped companies who have subsidiaries in other countries that
permit IFRS to have uniformity in their accounting methods company-wide. A study
shows that the firms that adopted IFRS early than others saw a decrease in the firms cost
of capital and increase in equity valuations as long as the firms have incentives to be
transparent and where legal enforcement is strong (Moser, 2014). Similar results were
gathered from other researches as well where the foreign equity investment rose as long
as the country had improving governance quality (Moser, 2014)
Globalization and the need for convergence

With the formation of the International Accounting Committee in the 1970s the natural
progression in the 1980s was to bring together developing and underdeveloped nation in
the path towards standardization (Doost, 1997). And with the whole world moving
towards globalization the importance of standardized accounting system made more
sense. Which includes the capital market being more and more homogenous with the
investors investing their money in businesses all over the world. In order to invest in
foreign markets, investors need reliable and comparable information (Zaidi & Paz, 2015).
The demand for standardized universal financial reporting standards among the investors
has increased a lot in recent years with the globalization on its peak. Thus, investors
believe that International Financial Reporting Standards (IFRS) developed by
International Accounting Standards Board (IASB) in 2001 provide harmonization of
accounting standards across countries (Zaidi & Paz, 2015). Zaidi and Paz also suggest
that the main reasons for IFRS development are international accounting firms,
multinational corporations, foreign investors, and international financial institutions. The
purpose for the establishment of IASB was to replace the International Accounting
Standard Committee (IASC) and develop a single set of global financial reporting
standards that can be easily understood and enforced (Peng & Bewley, 2010). The
followers of IFRS has been publicizing the advantages such as reducing risk and cost of
capital, increasing transparency, facilitating cross-border investing, and enabling
economic growth (Peng & Bewley, 2010) Around 100 countries are now trying to
converge their domestic accounting standards with internationally recognized IFRS, but
these countries are yet concerned about the uniformity of standards (Peng & Bewley,
2010). These concerns of uniformity in standards are referred as de jure convergence

(Peng & Bewley, 2010). The findings from the academic research shows that even the
countries that have adopted IFRS, claims that de jure convergence has not been achieved
(Peng & Bewley, 2010).
The following table shows the list of countries that have adopted and still to adopt in
Asia:

Countries that have adopted IFRS

Countries that have not adopted IFRS

Nepal

India

China

Bangladesh

Srilanka

Indonesia

Saudi Arabia

Malaysia

Turkey

Thailand

Armenia

Pakistan

Cambodia

Philippines

Maldives

Vietnam

Iraq

Iran

Convergence in China
The significant progress towards convergence started in 2006 when Ministry of Finance
(MOF) in China issued the Accounting Standards for Business Enterprise (Nie, Collins, ,
& Wang 2013). The Accounting Standards for Business Enterprise was a combined
pronouncement of a revised Basic Standard and new Chinese Accounting Standards
(CAS), which replaced the standards previously issued by CAS (Nie, Collins, & Wang
2013). Studies have shown that the convergence issue between Chinese GAAP and IFRS,
which involves some concentrating on de jure convergence, some on de facto
convergence and some concentrating on both (Peng & Bewley, 2010). Peng and Bewleys
research also showcase the comprehensive study of de jure and de facto convergence
issues significant to the new 2007 GAAP, which focuses more on convergence issues
from the Funding Value Adjustments (FVA) perspective. Studies on Chinas FVA have
not been focused in the accounting literature, so this study can be seen as the first one to
focus on the examination of IFRS fair value adoption and implementation issues in a
major emerging countries (Peng & Bewley, 2010). With the Chinese complex
interlocking aspects of the economic and political system, the FVA implementation in
China suggests that the current divergence in FVA requirements between IASBs IFRS
and 2007 GAAP is not practical to be shortening in the near future (Peng & Bewley,
2010). One of the major investigation was done to see whether the new accounting
standards regulation in China eliminated the differences between Chinese earnings and
IAS earnings, which produced three primary findings (Chen & Wang, 2002). According

to Chen & Wang (2002), the major findings after the implementation of new accounting
standards were high expectations among Chinese companies, failure of the seven revised
accounting methods, and earnings gap still in existence.
Convergence in U.S.A
It all began with the stock market crash in 1929. Congress passed the securities act of
1933 and the Securities Exchange Act of 1934, creating the Securities Exchange
Commission (SEC). After the creation of SEC, it was the responsibility of SEC to create
and publish any new accounting standards and in 1938, SEC voted to allow the private
sector to establish GAAP. Although GAAP was responsible to issue new accounting
standards, SEC retained its authority and the power to override the private sector (Moser,
2014). United States took the first step towards the road of worldwide accounting
standards back in 1988, when the Securities and Exchange Commission (SEC) issued a
policy statement supporting the establishment of mutually acceptable accounting
standards (AICPA Backgrounder, 2011).
Comparison between IFRS and U.S. GAAP
If we review IAS and U.S. GAAP in terms of the areas of conceptual framework,
treatments of related party transactions, contingencies, and provisions look similar
(Ampofo & Sellani, 2004). This also includes the financial ratios, which are used to
analyze financial statements being treated similarly by the IAS and U.S. GAAP (Ampofo
& Sellani, 2004). Although IAS and U.S GAAP have some similarities they are not away
from the differences. These differences reflect the diversity of society and nations, which

also reflects the differences in political, economic, social, cultural and business
environments. One of the major differences between U.S. GAAP and IFRS is the
presentation of balance sheet, which is in order of liquidity not permanency (Ampofo &
Sellani, 2004). For example, under U.S. GAAP, current assets are presented in order of
liquidity such as cash, accounts receivable and inventory (Ampofo & Sellani, 2004).
However under the IAS, current assets are shown after fixed assets in a reversed order
(permanency) (Ampofo & Sellani, 2004). The main reason for the liquidity presentation
approach used under U.S. GAAP is the relative marketability of the assets and
preferential payment of liabilities in time of liquidation or bankruptcy (Ampofo &
Sellani, 2004). On the other hand, IAS reasons for permanency is that a business is going
concern, which says that the business is not expected to dissolve in the foreseeable future
(Ampofo & Sellani, 2004). However, both the approach of presentation of financial
statements is useful to the intended users of the financial statements (Ampofo & Sellani,
2004). Along with the differences in presentation, the U.S. GAAP and IAS has some
valuation/ non transaction issues such as the non-purchased goodwill is not recognized as
an asset under U.S. GAAP (Ampofo & Sellani, 2004). Under IAS, purchased goodwill is
either amortized over its estimated useful life or reviewed for impairments under IASs (
Ampofo & Sellani, 2004) But under U.S GAAP, it has switched positions on amortization
of goodwill that was capped at 40 years to disallow the amortization method (Ampofo &
Sellani, 2004). Nevertheless, the current study is concerned more with the divergences
between American norms (US GAAP) and international accounting norms (IFRS)
(Baudot, 2014). In Statement of other recognized gain and losses in IFRS it requires a
separate statement, in an explanatory note or highlighted in the Statement of Changes in

Equity and in the US GAAP is required to disclose the total value and accumulated value,
in the form of a separate financial statement or combined with the Statement of Changes
in Equity (Baudot, 2014). Hence, the major differences between US GAAP and IFRS are
the conceptual structure of accounting (Bohusova & Svoboda 2009).
Accounting terminologies used under U.S. GAAP and IAS are not the same, though the
terms could be used interchangeably (Ampofo & Sellani, 2004). The IAS has a strong
U.K. English bias though American English is frequently used (Ampofo & Sellani, 2004).
A.A. Ampofo, R.J. Sellani / Accounting Forum 29 (2005) 219-231

US GAAP Terminology

IAS Terminology

Income Statement

Profit and Loss Accounts

Account Receivables

Debtors

Accounts Payable

Creditors

Capital Lease

Finance Lease

Allowance for uncollectible accounts

Provision for bad debts

Inventory

Stock

Common Stock

Ordinary Shares

Statement of Cash Flows

Cash Flow Statement

Accounts Receivable Confirmation

Debtors Circularization

Fig. b) some differences in U.S. GAAP and IAS terminologies.

One of the major differences between IFRS and USGAAP is between the structures they
have. IFRS uses principle-based structure that is essentially a generic set of accounting
standards that involves a degree of ambiguity and incorporates professional judgment
(Moser, 2014). In contrast, US GAAP uses rules-based structures that focus more on
providing rules in an attempt to cover many scenarios including industry specific
practices. In recent years, US GAAP has raised concerns that it may become too complex
in its rules-based approach (Moser, 2014). There is a significant difference in the
documentation as well, IFRS has 2,500 pages and US GAAP has around 25,000 pages
(Moser, 2014). After all these years of IFRS history US GAAP is still to adopt IFRS. On
one of the semi-annual survey done by American Institute of Certified Public
Accountants (AICPA) in 2010 it showed that around 54% of respondents were actually
asking for the adoption of IFRS for US public companies (Heffes, 2008). Even Though
some still believe that having few more convergence to the IFRS will be enough. Having
these convergence projects in process, the extent of the specific differences between IFRS
and U.S. GAAP is shrinking. Yet significant differences do remain. For example:

IFRS does not permit Last In First Out (LIFO) as an inventory costing method.

IFRS allows the revaluation of assets in certain circumstances.

IFRS uses a single-step method for impairment write-downs rather than the twostep method used in U.S. GAAP, making write-downs more likely.

IFRS requires capitalization of development costs, when certain criteria are met.

IFRS provides less overall detail and industry-specific guidance.

According to (Bohusova & Nerudova, 2009), the comparison between US GAAP and
IFRS could be done on the basis of revenue recognition as follows:

Item

US GAAP

IAS/IFRS

Difference
s

Revenue
definition

Actual or expected cash

inflows that have occurred or
will result from the entitys
ongoing major operations

The gross inflow of

economic benefits
during the period
arising in the course
of ordinary activities
of an entity

Similar

When it is probable
that future economic
benefits will flow to
the enterprise, can be
measured reliably

Different

Revenue
recognition
criteria

must be realized or
realizable

must be earned

many different sources of

revenue recognition guidance

Revenue
measurement

At fair value of the

consideration received or
receivable - cash or cash
equivalents

At fair value

Similar

Sale of goods

Delivery must have been

occurred, risks and rewards
are transferred, the price is
fixed or determinable,
collectibility is reasonably
assured, persuasive evidence
that an arrangement exists

Significant risks and

rewards of ownership
have been transferred

Similar

Rendering
Services

Services must have been

rendered to customers,
reliable measures based on
contractual prices establisher
in advance are available,
revenues may be recognized
as earned as time passes

Only when the

outcome of a
transaction involving
the rendering of
services can be
estimated reliably

Similar

Deferred
Payment

Discounting to present value

is not required

Value of revenues to
be recognized is
determined by
discounting

Different

Multiple
elements

Specific criteria are outlined

for dividing multiple
deliverable into separate
units specific criteria for
software services

Recognition criteria
are applied to the
separately identifiable
components of a
transaction in order to
reflect the substance

Similar

of the transaction

Long-term
contracts
revenue
recognition

Allows percentage of
completion method,
completed contract method

Allows percentage of
completion method,
zero profit method

Different

Long-term
contract
combining and
segmenting

Certain criteria must be met

Certain criteria must

be met

Similar

Convergence in Japan
Japans economic system since World War II is characterized by the strategic allocation
of resources by political, bureaucratic and business processes (Koga, Houghton, & Tran,
1998). After the World War II the whole nations economic policy is to obtain a
competitive advantage in the international marketplace (Koga, Houghton, & Tran, 1998).
After Japanese firm became aware of the international marketplace, these firms started
the policy of supplying funds at low cost to industries such as basic manufacturing,
public utilities, financing, and trading industries (Koga, Houghton, & Tran, 1998).
Moreover, Japanese business system adopted a different structure and was establishing a
close working connection with the banks (Koga, Houghton, & Tran, 1998). Japans main
purpose of bringing change in their accounting standards was to reduce the cost of capital
to the firms, which is in contrast to the western model of achieving the goal of reducing

the cost of equity of capital though creating an effective market (Koga, Houghton, &
Tran, 1998).
Japan started improving its accounting standards in the late 1990s, when Japan started to
reform its accounting standards to align more closely with U.S GAAP and IAS (Yorihiro,
2011). In 2005, the Accounting Standards Board of Japan (ASBJ) and International
Accounting Standards Board (IASB) agreed to converge between Japanese GAAP and
IFRS (Yorihiro, 2011).
Comparison between U.S.A, China and Japan in terms of Geert Hofstedes
Dimensions
Culture of a particular country is a major critical factor in explaining the choice of
relevant accounting systems. Hofstedes study focused on work related cultural values
held by employees at multinational companies in about 50 different countries (Nicholson
& Stepina 1998). Hofstedes research shows that the cultures might differ according to
six major cultural dimensions: power distance, individualism, masculinity, uncertainty
avoidance, long-term orientation, and indulgence (Zehri & Chouaibi, 2013). Nicholson
& Stepina mentions that Hofstedes framework has been widely accepted and cited in the
cross-cultural management literature. Hofstedes dimensions provided a valid and strong
evidence that management theory and practice are culturally dependent, which also
demonstrates the differences in national and regional cultures that show up in the work
values (Nicholson & Stepina 1998).

According to Geert Hofstede's Dimensions of National culture, China has a high power
distance compared to the United States that allows people from China; mostly people at
the bottom of the organization accept that the power is unequally distributed. In addition,
China has low levels of individualism compared to United States that makes the people of
China in the interests of the group and not necessarily themselves. In contrast, Americans
value doing business and therefore are not shy to approach also the people who they dont
know to seek information. In United States the concept of individualism is much
powerful, although having very good economy yet all the companies are seeking for
employees overseas to lower the overhead cost (Seitz, 2001). In addition, the
commitment between employees and the company in United States is not very strong
(Seitz, 2001).
According to Hofstedes dimension, Japan has higher masculinity, uncertainty avoidance,
and long-term orientation. Japanese societies are more driven by competition,
achievement, and success than in U.S, which makes them higher masculine than U.S. The
values of people in Japan are created in childhood and carried throughout their life.
Japanese people have higher uncertainty avoidance, which makes them believe that the
future are unknown and its not on the hand of people. The companies in Japan are more
focused on employees stability than U.S companies because they have more indulgence
than U.S.
Conclusion
This research has shown the evolution of IFRS through the means of standardization
timeline. It also focuses on the benefits of convergence by demonstrating the growing

need of uniformity in accounting standards with the globalization. This research focused
on the ways that each of the three different countries U.S, China and Japan has applied in
order to have a feasible environment for the convergence to IFRS. More importantly, this
paper helped to compare the cultural values and effects of these values in accounting
ethics among these countries.
Suggestions for Future Research
The things that are overlooked by the IFRS in trying to create a uniform set of accounting
standards around the world are the level of business infrastructure, level of skills and
knowledge of the accountants, high cost of implementation, and the effects that IFRS
have in ethics of accountants in most developing countries. While the convergence of
IFRS seems reasonable to many developed countries, companies in developing countries
may not be able to experience the economic benefits as expected and enjoyed by the
developed countries.
After going in detail on the different stages of convergences and the significance of
convergence in emerging Asian countries using the current data (2014). It is clear that the
current demand for the need in convergence as well as the rate at which countries are
converging their accounting standards to IFRS in Asia is high. Based on our examination
of work of Chakrabarty and Moser (2014), we see that there is a significant amount of
monetary loss at the initial stage when a country decides to merge to the new standards.
However, further researches are still to be done in order to say that the companies in a
particular country will be benefited from convergence in the long run. Although,
according to Peng & Bewley (2010) the convergence is supposed to have positive effect

in the economy of the country as a whole, but it doesnt take into consideration the size of
the firms and the amount of time invested until the costs incurred in the beginning stages
are covered. This puts most of the countries in dilemma of whether to converge with
IFRS or to just run as it is, because there is not enough evidence to convince and
encourage firms to converge. Therefor in the upcoming years new data will show more
concrete evidence that might support this hypothesis or disapprove it. After going through
all this we can say that the future research is needed to be done, which will help
highlighting the payoff of the investment made by the companies in their early stages in
the convergence. This will then help persuade the companies in emerging Asian countries
to consider the investment and get closer to the dream of achieving uniformity in
accounting standards.
Based on the works of Zaidi and Paz (2015), we suggest future research to be done on
whether or not globalization has affected ethics and values of the accountants in Asian
countries. As the whole world is booming with the globalization and investors are
investing on everything they can with the hope of thriving business all over the world. At
this point in time, there hasnt been enough research done to see how the globalization
and convergence to IFRS has an impact over the accountants. With the data that is present
at this time we have found that not only do these convergence take time, but also tend to
take a toll on accountants who may not fully agree with these new procedures. Only
future data from these surveys will show if accountants from these countries will
conform, or if they will continue to stand by what their ethical compass tells them, and
risk the penalty that will most certainly lie ahead. In theory we plan in having a one
standard for all countries world wide, yet the reality is that what might be considered

correct in the United States may morally incorrect among other cultures. As we move
towards these new implementations, these countries will have to inevitably adapt to those
who continue to disapprove of what is the new standard. Therefore, further research is
needed to see how these countries will handle such incidents. As we have seen in
previous years China has been trying to keep up in their legal system since 1993 with
their first establishment of the China Securities Regulatory Commission. What we aim to
find in future research is similar agencies across national borders. For instance we should
expect to see growth in federal agencies investment, due to new regulations that will be in
need of reinforcement. This is also where we see the initial lost in which we discussed in
the previous, request of further research.
Based on the works of Ampofo and Sellani, we suggest that the global accounting
education should place a greater emphasis on producing global accountants and increase
their mobility across the world of business. Future research regarding the level of
education in accounting in various countries with or without the IFRS must be done in
order to predict the level of understanding and to see how reliable the financial reporting
are. Accounting professions in many developing countries do not posses skills to
comprehend the newly enacted standards, which in turn would lead to unreliable financial
reporting. So, the requirements of IFRS to adapt to these new sets of standards may go
against these countries. Thus, more research is required to understand how skilled and
well trained these accountants are; which will then help realize whether or not they could
tackle the difficulties of learning new standards. Finally, IFRS must find a way to
incorporate the need of developing countries taking into consideration of their economic
and political factors.

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