GAAP convergence or convergence Gap: unfolding ten years of accounting change

    Authors

    L. Baudot

    Comments

    Authors: contact us about adding a copy of your work at STARS@ucf.edu

    Abbreviated Journal Title

    Account . Audit Account.

    Keywords

    Change processes; Accounting convergence; Global standard-setting; PROFESSIONAL SERVICES; ORGANIZATIONAL-CHANGE; MODERNIZATION THEORY; POLITICAL-ECONOMY; WORLD-SYSTEM; STANDARDS; STATE; FIELD; DISCLOSURE; RISE; Business, Finance

    Abstract

    Purpose - The purpose of this paper is to add to the literature on accounting change in explaining a decade-long effort by the FASB and IASB to develop a set of global accounting standards accepted by markets worldwide. This research studies the effort as one of "convergence" in accounting standards and aims to bring theoretical and empirical clarity as to how we can conceptualize the notion of convergence. Design/methodology/approach - Through a longitudinal study of 23 key FASB-IASB projects undertaken between 2002 and 2011, this paper analyzes processes of accounting change using a blend of institutional theory and political economy. A process perspective provides a method to unfold variants of accounting change by identifying patterns that help us to understand the conditions for and characteristics of convergence. Findings - The author highlights specific variants of accounting change observed during the convergence effort - direct emulation, difference reduction and progressive redesign - as analogous to institutional processes. Where direct emulation and difference reduction reflect institutional processes of imitation and editing or translation, respectively, the author shows how progressive redesign of accounting standards goes beyond these classical categorizations to encompass the notion of "institutional co-construction" (Djelic, 2008). Research limitations/implications - A longer (shorter) period of study and a greater (lesser) number of projects could be argued for a more comprehensive (more detailed) study; however, limiting the period and project to the terms of the formal convergence program allows for forces driving this particular process to be isolated and their effects extrapolated to broader thinking on accounting and global regulation. Originality/value - This research informs the global standard-setting community of the evolution of convergence and the factors which impact that evolution by revealing the influence of various institutions, actors and events over time. In particular, the author identifies the impact of the competitive and cooperative conditions under which the FASB-IASB convergence effort operated and reveal how these conditions were influenced by the macro-level economic and political developments occurring over the period.

    Journal Title

    Accounting Auditing & Accountability Journal

    Volume

    27

    Issue/Number

    6

    Publication Date

    1-1-2014

    Document Type

    Article

    Language

    English

    First Page

    956

    Last Page

    994

    WOS Identifier

    WOS:000341641700004

    ISSN

    0951-3574

    Share

    COinS