Title: Are U.S. Academics and Professionals Ready for IFRS? an Explanation Using Technology Acceptance Model and Theory of Planned Behavior
Abstract: INTRODUCTION AND BACKGROUND Differences across nations from language, history to economy have constructed barriers that challenge the ease of doing business globally. As such the accounting standards and financial reporting have been raised as an international issue to be addressed. To overcome international accounting standards problem, establishing mutually acceptable and agreeable commitments among diverse set of countries, existence of an international institution has become crucial (Lange & Howieson, 2006). In order to provide optimum understanding of cross-border business transactions, accounting standards are set accordingly by an independent and internationally recognized accounting standard-setting institution: International Accounting Standards Board (IASB). The fast pace of globalization and the international financial markets have stimulated the need for a common financial language; IFRS which is under the auspice of IASB, an independent accounting standard-setting body based on London. The IASB morphed from another organization called the International Accounting Standards Committee (IASC) that was established in 1973 (Kennedy, 2010). Several countries around the world have already adopted IFRS and a few are to follow. Around 120 countries have completely or partially embraced International Financial Reporting Standards (IFRS, 2010). The European Union has made it mandatory for publicly traded companies to use IFRS to prepare their financial statements (Brackney and Witmer, 2005). Other countries recently joined including Canada and Korea. Mexico is planning to require all listed companies to report using IFRS in 2012. As for the U.S., the Financial Accounting Standards Board (FASB) and the IASB in their meeting in September 2002 reached an agreement, called the Norwalk agreement, to converge on a single set of accounting standards. They also agreed to make their existing financial reporting standards fully compatible and to coordinate their future work programs to maintain that compatibility (Hermann and Ian, 2006). There are around 11,000 firms registered with the U.S. Securities and Exchange Commission (SEC), of which about 1,100 are non-U.S. companies (Oracle Corporation, 2008). In 2005, the U.S. SEC allowed non-U.S. firms to submit their financial statements in compliance with either U.S. GAAP or IFRS; on the condition they reconcile discrepancies in the results between the two. But in 2007, the U.S. SEC voted to drop the reconciliation requirement for financial statements for the year 2007 (Smith, 2008). The United States was scheduled to require all publicly traded companies to prepare their financial statements based on IFRS by 2014 as it was announced by the U.S. SEC in 2008 (Kennedy, 2010). However, the U.S. SEC decided in February 2010 that 2015 might be the earliest possible date for IFRS adoption by the U.S., calling for more study of IFRS (Defelice and lamoreaux, 2010). The U.S. Generally Accepted Accounting Principles (GAAP) and IFRS have some similarities and differences. One of the differences is that U.S. GAAP is rule-based type of standards while IFRS is more of a principle-based set of standards (Arthur, 2005). The U.S. GAAP is intended to enforce compliance by having detailed rules, while IFRS is intended to improve transparency yet subject to implementers' judgment. The objective of this study is to attempt to investigate the acceptance of the U.S. academics (accounting and auditing students and professors) as well as practitioners (auditors, accountants, CPAs, and financial analysts) to converge to IFRS as a common accounting and financial reporting language. We attempt to determine the extent to which the perception about risks, usefulness, and familiarity with IFRS affect the perception of readiness to adopt the new standards. Specifically, we introduce a modified model based on the technology acceptance model (TAM) and the theory of planned behavior TPB to test the contribution of these factors. …
Publication Year: 2013
Publication Date: 2013-04-01
Language: en
Type: article
Access and Citation
Cited By Count: 16
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot