Generally Accepted Accounting Principles

We provide evidence on the characteristics of local generally accepted accounting principles (GAAP) earnings for firms cross-listing on U.S. exchanges relative to a matched sample of foreign firms currently not cross-listing in the United States to investigate whether U.S. listing is associated with differences in accounting data reported in local markets. We find that cross-listed firms differ in terms of the time-series properties of earnings and accruals, and the degree of association between accounting data and share prices. Cross-listed firms appear to be less aggressive in terms of earnings management and report accounting data that are more conservative, take account of bad news in a more timely manner, and are more strongly associated with share price. Furthermore, the differences appear to result partially from changes around cross-listing and partially from differences in accounting quality before listing. We do not observe a similar pattern for firms cross-listed on other non-U.S. exchanges or on the U.S. over-the-counter market, suggesting a unique quality to cross-listing on U.S. exchanges. * University of North Carolina, Chapel Hill; †University of Iowa. We appreciate helpful suggestions from Ray Ball (editor); Peter Joos (referee); workshop participants at the Journal of Accounting Research conference,

In this study, we use institutional theory to explore how institutional pressures exerted on four state governments (New York, Michigan, Ohio, Delaware) in¯uenced the decision of these governments to adopt or resist the use of generally accepted accounting principles (GAAP) for external ®nancial reporting. We identify resource dependence as a potent form of coercive institutional pressure that was associated with early GAAP adoption. We identify three factors that may lead to initial resistance to institutional pressures for change. First, if accounting bureaucrats are not active in professional associations that promote GAAP adoption, they may miss the educational process that we believe is important to early adoption of GAAP. Second, organizational printing may impede GAAP adoption. Third, powerful interests may impede GAAP if the proposed GAAP legislation is expected to alter the existing power relationships. We found that key accounting bureaucrats in New York and Michigan used``compromise'' as an initial strategic response to institutional pressures to adopt GAAP, Ohio's key accounting bureaucrat adopted a``defy'' strategy, although the political leadership endorsed an``acquiesce'' strategy. While Delaware initially employed a``manipulate''strategy with some success. Delaware did not adopt GAAP for external reporting until a political entrepreneur for GAAP emerged in the early 1990s. Our study suggests that all strategic responses to resist institutional pressures for GAAP adoption will ultimately fail because of the potency of the institutional pressures that result from the well organized professional accounting and governmental institutional ®elds.

The immediate expensing of research and development (R&D) expenditures is often justified by the conservatism principle. However, no accounting procedure consistently applied can be conservative throughout the firm's life. We therefore ask the following questions: (1) When is the expensing of R&D conservative and when is it aggressive, relative to R&D capitalization? (2) What are the capital-market implications of these reporting biases? To address these questions we construct a model of profitability biases (differences between reported profitability under R&D expensing and capitalization) and show that the key drivers of the reporting biases are the differences between R&D growth and earnings growth (momentum), and between R&D growth and return on equity (ROE). Companies with a high R&D growth rate relative to their profitability (typically early life-cycle companies) report conservatively, while firms with a low R&D growth rate (mature companies) tend to report aggressively under current generally accepted accounting principles. Our empirical analysis, covering the period 1972-2003, generally supports the analytical predictions. In the valuation analysis we find evidence consistent with investor fixation on the reported profitability measures: we detect undervaluation of conservatively reporting firms and overvaluation of aggressively reporting firms. These misvaluations appear to be corrected when the reporting biases reverse from conservative to aggressive and vice versa. This evidence is consistent with behavioral finance arguments about investor cognitive biases.

Prior research has shown that loan loss provisions are primarily used as a tool for earnings management and capital management by listed banks. Effective 2005 all listed companies in the European Union (EU) are required to comply with International Financial Reporting Standards (IFRS). Adherence to IFRS, it is claimed, should enhance transparency of reporting practices relative to local General Accepted Accounting Principles (GAAP). The overall objective of this paper is to examine the impact of the implementation of IFRS on the use of loan loss provisions (LLPs) to manage earnings and capital. We use a sample of 91 EU listed commercial banks covering a period of 10 years (before and after implementation of IFRS). Since early adopters may have different incentives and motivations relative to those who adopt mandatorily, we dichotomize our sample into early and late adopters. Overall, we find that earnings management (using loan loss provisions) for both early and late adopters while significant over the estimation window is significantly reduced after implementation of IFRS. We also find that, for risky banks, earnings management behavior is more pronounced when compared to the less risky banks, but is significantly reduced in the post IFRS period. Capital management behavior by bank managers is not significant in both pre and post IFRS regimes. Overall, we conclude that the implementation of IFRS in the EU appears to have improved earnings quality by mitigating the tendency of bank managers of listed commercial banks to engage in earnings management using loan loss provisions.

We contribute to the debate about the relative benefits and costs of International Financial Reporting Standards (IFRS) adoption by examining whether earnings persistence and the association between current accounting earnings and future cash flows differ for firms reporting under IFRS versus firms reporting under United States Generally Accepted Accounting Principles (U.S. GAAP) and firms reporting under non-U.S. domestic accounting standards (DAS). Using samples comprised of 58,832 firm-year observations drawn from 33 countries from 2002 through 2008, we find that positive earnings reported under IFRS are no more or less persistent than earnings reported under U.S. GAAP but losses reported under IFRS are less persistent than losses reported under U.S. GAAP. Moreover, we find that earnings reported under IFRS are no more or less persistent and are no more or less associated with future cash flows than earnings reported under non-U.S. DAS. However, we find that earnings reported under U.S. GAAP are more closely associated with future cash flows than earnings reported under IFRS. This is important if a key role of reported earnings is to help investors form expectations about future cash flows. These results should be of interest to academics and standard-setters as they debate the merits of transitioning to IFRS, and to parties who use reported earnings to form expectations about future earnings and cash flows.

In this paper, we draw on economic and socIologicaI theories in order to explain public sector incentives to adopt generaiiy accepted accounting principles (GAAP), using the state of New York's decision to adopt GAAP for external financial reporting We argue that the state% decision to adopt GAAP was an attempt to regain legitimacy for the state's Rnanciai managcmcnt practices. histitutionaI interests demanding New York use GAAP were part of the sociok+aI phenomenon caRed institutionai isomorphIsm. Power relations and orga&adonaI politics related to the state's budgetary process also sign&a&y inlluenccd the state's decision to adopt GAAP. However, although professional &es made strong statements that GAAP adoption wouid improve the state's financiaI management practices, we found no compeBing evidence that producing GMP IinanciaI intbrmation has significantIy altered the state's IinanciaI management practices. As Comptroller, I learned the language that was used to make the manipulation of cash-basis accounting seem part of the natural order of things-terms such as "spring borrowing", "magic window", "rollover", and "two-year lag"and I was faced with having to oversee the borrowing of biBions in April to pay bills deliberately deferred from the past fiscal year. . I was proposing to change a whole system of governance, a whole scheme of statutes and Ingrained procedures. My job was to do what abvays has to ix done to PUB off a major achievement in government: Get the merits of the position and the prevailing politics to coincide (Regan, 1988, p. 21).

We assess the value relevance of the amounts for identifiable intangible assets and goodwill reported in the financial statements of all non-finance companies listed on the main market of the Portuguese Stock Exchange from 1998 to 2008. Additionally, we use panel data to explore the impact on value relevance of Portugal's formal adoption of International Accounting Standards [IAS] and International Financial Reporting Standards [IFRS] in 2005. A distinctive feature of the accounting by our sample companies is that when they adopted IAS 38 and IFRS 3 in 2005, they were no longer required to recognise some intangible assets (such as start-up costs and research expenditures) and were no longer required to amortise goodwill. We find that net earnings, reported goodwill and other intangible assets are highly significantly associated with stock price. However, whereas earnings are related positively to stock prices when Portuguese Generally Accepted Accounting Principles (GAAP) were applied prior to 2005, the value relevance of earnings appears to have declined after the adoption of IAS/IFRS in 2005. Although the change to IAS/IFRS had no impact on the value relevance of identifiable intangibles as a whole, the evidence suggests that there was a positive effect on the value relevance of goodwill. When the subclasses of identifiable intangible assets are considered, we found evidence of an increase in value relevance of goodwill, other intangible assets, and research and development expenditures.

With the International Accounting Standards Committee (IASC) reaching the completion of its core standards program, the International Organization of Securities Commissions (IOSCO) is considering its response to the IASC's application for endorsement of International Accounting Standards (IASs). A critical aspect of IOSCO's acceptance of IASs is likely to be the extent to which such standards are compatible with US Generally Accepted Accounting Principles (US GAAP). This issue is explored by an empirical study of US GAAP reconciliations by non-US companies complying with IASC standards. The results indicate that the impact of accounting differences between IASs and US GAAP is narrowing and suggest that the Securities Exchange Commission (SEC) should consider accepting IASC standards without condition. Alternatively, an SEC endorsement could include a short list of IASs where acceptance is subject to additional disclosures.

We examine whether firms that capitalize a higher proportion of their underlying intangible assets have higher analyst following, lower dispersion of analysts' earnings forecasts and more accurate earnings forecasts relative to firms that capitalize a lower proportion. Under Australian generally accepted accounting principles, capitalization of intangible assets has become increasingly 'routine' since the late 1980s. It is predicted that this experience leads Australian analysts to expect firms with relatively more certain intangible investments to signal this fact by capitalizing intangible assets. Our results are consistent with this. We find that capitalization of intangible assets is associated with higher analyst following and lower absolute earnings forecast error for firms with a stock of underlying intangible assets. Our tests suggest a weaker association between capitalization and lower earnings forecast dispersion. We conclude that there are benefits for analysts, for management to have the option to capitalize intangible assets. These findings suggest that IAS 38 Intangible Assets and AASB 138 Intangible Assets reduce the usefulness of financial statements.

The Governmental Accounting Standards Board (hereafter GASB or Board) was established in April 1984 as the authoritative accounting standard-setting body for state and local governmental entities in the United States. There are over 87,000 state and local entities in the country and for the most part these entities are required to comply with the generally accepted accounting principles established by the GASB; hence, the standards promulgated by the GASB are significant. On 30 June 2009, the GASB completed its twenty-fifth year of standard setting. Because of the Board's influence and the importance of its mission, an increased understanding of the GASB and its accomplishments during its first 25 years of existence is important. This is the second of two papers which together provide a complete sequential treatment of the GASB's operational history through the end of its first quarter century. The first part provided an historical perspective about municipal accounting issues from colonial times to 2009 and included appendix materials identifying the composition of the Board and biographical material on key personnel. The first paper concluded with a review of the relationship of other governmental standard setting bodies at the Federal and the International level. This paper provides an overview of the future challenges faced by the Board and supplies a digest of the standards including appendix and a synoptic summary of the standards the Board has promulgated by topic and by standard number.

Government regulation of financial reporting by publicly listed firms, coupled with a punitive regime for violation of generally accepted accounting principles (GAAP), has been in place in the United States for seven decades. Whether this regime is effective or useful is an open question, especially in the absence of data on the behavior of unregulated economies. Privacy disclosure in e-commerce is essentially an unregulated environment with some parallels to financial disclosure. A study of privacy standards, disclosures practices, and demand for audits can help accountants and security regulators project the consequences of a competitive regime sans regulation for accounting standards, disclosure and audit practices. In this article we set up a framework for such a study, gather data from the field, and analyze privacy standards, privacy disclosure practices, and the effectiveness of opt-out practices of 100 high-traffic e-commerce Web sites. We observe four diverse sets of privacy standards (TRUSTe, BBB Online, WebTrust, and PWC Privacy) competing in this market, attracting clienteles of their own as reflected in privacy policies and the disclosure of such policies. With a few exceptions, actual disclosure and opt-out practices correspond reasonably well to stated policies in e-commerce. There is little evidence that the prevailing competitive regime induces a race to the bottom with respect to privacy standards and disclosures. We explore the implications of these results for the consequences of a competitive regime for regulation of financial reporting.

The accounting standardization project, kicked off by the passage of US securities laws in the 1930s, has steadily gained momentum over seven decades. Today, written standards dominate accounting thought, practice, regulation, instruction, even research. Generally accepted accounting principles-originally a mere description in its plain English meaning-have since been capitalized into a proper name-Generally Accepted Accounting Principles-and the phrase now describes rules and regulations issued by authorities with power to inflict punishment on those who do not choose to accept them. How and why did financial reporting get caught in the standardization project, replacing social norms of corporate and professional behavior by written rules and standards? What are the consequences of this transformation? What alternative courses are available to accounting and corporate governance? I argue that heavy reliance on the codification of financial reporting has been a wrong path. A shift from rules towards norms of behavior may yet help accounting and corporate governance recover a better balance.

In Italy, national generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS) regulations coexist, despite differences that lead to their antagonist forms of accounting relativism. In this context, the two accounting systems provide for different representations of stock options plans, with significant effects on year-end income measures. This study therefore considers the emblematic case of stock options with the goal of demonstrating, on the basis of the dominant accounting principles and conventional wisdom in Italy, that the aforementioned difference cannot be explained by reasons connected with the accounting conceptual framework of reference in each system. Rather, inquiries should focus on weaknesses in national GAAP.

This paper models the impact of the tax system and GAAP on the real and financial reporting decisions of corporations. It provides a first step toward joint evaluation of taxation and financial reporting in the standard economic analyses of corporate behavior. The key finding is that value arises from real decisions that provide firms with discretion in their tax and financial reporting. This desire for flexibility modifies the optimal decisions of firms, in theory, and we provide examples that illustrate this behavior in the real world.

New types of "measurements" are needed for both tradable and non-tradable assets in order for organisations to meet the challenges present at the corporate, national and international levels, especially in the areas of strategic decision-making and valuation. The focus of attention in recent studies has been on the valuation of intangibles. This paper argues that it is the combination of both tangible and intangible assets that provide an organisation a "capability" that ultimately drives its economic value. The paper then reports on a research study conducted to value organisational capabilities for a strategic military unit (SMU), and a reporting framework comprising a strategic balanced sheet and strategic income statement that was developed for this purpose. The valuation approach is basically to calculate the Capability Economic Value of Intangible and Tangible Assets (CEVITA TM ) of an organisation by leveraging its capability-enhancing expenses to economic values by using specific Expense Leveraged Value Indexes (ELVI TM ). 2 This paper illustrates a technique that will not only make these strategic valuations more relevant, but also show how to report these tangible and intangible asset combinations in an organisation's financial statements. Even if generally accepted accounting principles cannot accommodate such value-creating information for external reporting, it is argued that, we need to develop them for internal reporting that is less constrained.

Many allege that the accounting profession has failed to adapt to fundamental changes in the business environment because it has not developed timely guidance for reporting intangible assets. Regulatory attention has also focused on the disclosure companies make with respect to intangible assets. Accounting for the value of intangible assets acquired in a merger transaction is a key component of this issue.

To meet external financial reporting requirements, fixed (i.e., capacity related) manufacturing overhead costs are typically applied to inventory via the use of a predetermined overhead application rate. However, textbooks do not consider all appropriate conceptual issues regarding the setting of the overhead application rate nor how these issues influence the causes of misapplied capacity costs (under/over-applied fixed manufacturing overhead) typically reported as the Production Volume Variance. Specifically, discussion is lacking related to those misapplied capacity costs potentially caused variously by the presence of capacity that is not explicitly planned to be used, capacity that is currently unused but in the longer-term is planned to be used (due to anticipated growth), and capacity that is currently unused but in the shorter term is planned to be used due to seasonality. Determining if any of these three causes are contributing to misapplied capacity costs is critical, as there are important managerial accounting and financial accounting reporting implications associated with each. And while the relevant literature to be discussed offers support for these causal constructs, this paper extends this literature by developing a parsimonious and conceptually-based approach to permit a simultaneous partitioning of misapplied capacity costs into these causal categories. Further, this paper will identify the important conceptual differences among these three causes, how these differences warrant unique approaches for the managerial and financial reporting of information related to capacity costs and utilization, and needed changes 0748-5751/$ -see front matter Ó

Purpose – The paper seeks to analyze the impact of differences between the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles in the United States (US GAAP) in the economic-financial indicators of English companies. Design/methodology/approach – The research is characterized as descriptive-quantitative, using regression and correlation analysis. The study was developed on 37 English companies that negotiate American

We explore to what extent firms deliberately manage their financial reports by exploiting the flexibility of generally accepted accounting principles. Using a sample of Oslo Stock Exchange-listed firms with 20-50% equity holdings in other firms, we find that firms with high financial leverage tend to maximize reported earnings from these investments through their choice between the cost method and the equity method, possibly in an attempt to reduce debt renegotiation costs or to avoid regulatory attention.

Previous research asserts that companies that choose accounting methods more familiar to investors reduce information asymmetry and increase credibility of their financial statements to those investors, thereby attracting higher levels of foreign investment. This study examines the variation in accounting policies associated with institutional investment in Australian equity. The results suggest that large US institutional holdings in Australian companies are associated with American Depositary Receipt listing and, incrementally, choice of accounting methods that conform to US Generally Accepted Accounting Principles (GAAP). Although making accounting choices in compliance with US GAAP is significantly associated with higher levels of institutional ownership in a statistical sense, examination of the specific differences in accounting choices suggests that the differences in informational content are relatively minor.

This report was prepared by a staff team from the World Bank on the basis of the findings from a diagnostic review carried out in Quito and Guayaquil from October to December 2003. The team comprised Henri Fortin (LCOAA) and M. Zubaidur Rahman (OPCFM). The review was conducted through a participatory process involving various stakeholders and led by the country authorities. The ROSC assessment was cleared for publication by the Ministry of Economy and Finance on January 19, 2005.

As part of the U.S. regulatory requirements, non-U.S. companies registered on U.S. stock exchanges ('foreign registrants') are required to compile financial reports that comply with U.S. Generally Accepted Accounting Principles ('GAAP') or provide a reconciliation of non-U.S. GAAP financial statements to U.S GAAP (20-F reconciliation). The objective of this study is to determine if identical information with respect to U.S. GAAP may be evaluated differently depending on whether the 20-F reconciliation information is presented in a positive (20-F reconciliation gain) or negative (20-F reconciliation loss) way. The research results indicate that the financial professionals' investment recommendations were significantly lower for a firm when it reports a reconciliation loss relative to when it reports a reconciliation gain or when it reports under U.S. GAAP, although the financial results were identical in all cases. Further, consistent with Bradshaw [Bradshaw MT. How do analysts use their earnings forecasts in generating stock recommendations? Account Rev 2004;79(1):25-50.], the financial professionals' expectations of earnings growth were significantly and positively associated with their investment recommendation.

We examine to what extent firms adhere to the stated intent of noncompulsory accounting standards when reporting for intercorporate investments. The Generally Accepted Accounting Principles (GAAP) in Norway strongly recommend that a 20 -50% intercorporate investment is accounted for by the equity method rather than the cost method, if the investment is long-term, of strategic importance, and involves significant influence. Even so, we find that the actual use of the equity method is independent of the duration of the investment period, the fraction of equity held, its recent growth, and the investor's voting power. This lack of compliance suggests that one cannot use the observed choice between the cost method and the equity method to infer the underlying characteristics of the investment as specified by the accounting standard. Flexible GAAP may therefore not induce firms to disclose the information that the GAAP were designed to produce.

Under generally accepted accounting principles (GAAP), firms must postpone recognition of the earnings effects of capital expenditures until they realize the resulting revenues and expenses. However, if capital expenditures change the profile of future profits, we expect share prices to impound that revision in profitability prior to its recognition under GAAP. This suggests that changes in capital expenditures should have information content beyond current-period unexpected earnings. Prior research considered annual changes in capital expenditures and detected incremental information only in restricted samples. However, we examine more general samples and observe that quarterly as well as annual changes in capital expenditures are informative beyond unexpected earnings. Furthermore, we predict greater incremental information content for fiscal fourth quarter changes in capital expenditures when considering all fiscal quarters simultaneously, because the effect of the earnings recog...

The "Big 6" public accounting firms have invested considerable resources in the development of expert system (ES) for a variety of auditing tasks. However, the tasks for most existing auditing ESs appear to have been selected based on accessibility and cooperation of experts, and~or the judgmental evaluation of the developer, rather than a careful selection of the task from among a number of viable alternatives. A critical aspect of task suitability is the degree to which the characteristics of a candidate task match the capabilities of ES technology. In this study, a questionnaire was developed to obtain task-related information from practicing auditors in order to distinguish among candidate auditing tasks in terms of their suitability for ES development. Auditors in the "'Big 6" public accounting firms were asked to provide ratings of the knowledge, data, and task characteristics of nine judgmental auditing tasks. The analysis of the data obtained from fifty-nine auditors revealed that the nine tasks were distinguishable in terms of their suitability for ES application. Two tasks, determining compliance with generally accepted accounting principles and audit work program development, were relatively better suited for ES application, while determination of the adequacy of an allowance and going concern evaluation were the tasks least suited for ES application. The fact that actual ES development efforts in the "'Big 6" firms have emphasized the compliance and audit work program development tasks provides a degree of validation of our results.

SYNOPSIS: The Canadian Accounting Standards Board (hereafter, AcSB) recently issued an exposure draft to adopt separate GAAP for private enterprises. This new GAAP is justified as being consistent with the current FASB/IASB conceptual framework, but is sensitive to the different cost-benefit considerations facing private entities. We view this proposal as being innovative and responsive to the differential reporting needs of private entities. In this article we explain our reasoning and conclusions on several issues raised by the exposure draft starting with a discussion about the need for a separate conceptual framework for private enterprises. We sketch a preliminary conceptual framework that could be used to develop and justify the type of changes proposed in this exposure draft. We then discuss key issues raised in the exposure draft such as reliance on historical cost as the key basis of measurement, the significant reduction in disclosure requirements for private enterprises, ...

This article focuses on funding issues facing local government in Russia during the current financial crisis. It concludes that efforts to develop a budget for the Lysogorski raion were hampered by (1) lack of generally accepted accounting principles, (2) the transfer of commercially unproductive assets from old Soviet enterprises to local authorities, (3) no funding for capital improvements, (4) unshared private information, (5) lack of economic resources to fund everyday purchases, (6) a return to the barter system, and (7) a chaotic system of raising and allocating tax revenue.

As a response to the absence of an exhaustive generally accepted accounting principle handling the issue of intangibles, academics and practitioners have developed a plethora of models, methods and tools for identifying, measuring and valuing intangibles. Conscious of this situation, some authors have started asking for empirical studies of how these models make the IC issue clearer to stakeholders in general and specifically to the capital market .

The ultimate goal of a move to IFRS International Financial Reporting Standards is the rigorous application of a single set of global accounting standards, which will produce highquality, (International Financial Reporting Standards) in the US undoubtedly would mark a significant change for many US companies. It would require a shift to a more principles-based approach, place far greater reliance on management (and auditor) judgment, and spur major changes in company processes and systems.

In response to rapid development in the economy, the Malaysian Accounting Standards Board (MASB) was established in 1997. The board is responsible for developing accounting standards and continually improving the quality of external reporting in Malaysia. In the development process, constant reference is made to the work of national standard setters of other countries and the International Accounting Standards Committee. This paper highlights major similarities and differences between United States Generally Accepted Accounting Principles (GAAP) and Malaysia approved accounting standards, and offer some suggestions as to how Malaysia might effectively continue with the further development and restatement of its accounting standards. This study finds no significant difference in the basic accounting principles, assumptions and reporting format between U.S. GAAP and MASB standards. However, some differences in rules regarding specific accounting elements have been identified. Hence, further research is needed in order to understand differences and similarities between accounting standards of the two countries in greater detail.

Resumen:
Mediante una metodología de investigación con enfoque cualitativo e inductivo, se desarrollan las características que el grupo investigador logra explorar sobre las prácticas contables generalmente utilizadas por los tenderos en los microestablecimientos de la comuna cuatro de Medellín, con el objetivo de obtener y consolidar información concreta y empírica del mencionado sector, para transitar de la intuición a un conocimiento más certero y riguroso y ser base para posteriores desarrollos de un sector que tiene gran incidencia a nivel nacional. En pro de esto y para lograr un conocimiento contextual del objeto de estudio, se realiza una descripción del sector económico informal, además de otorgar varias definiciones de corte económico, legal y contable inherentes a la temática. Finalmente, se concluye que las tiendas de barrio de la comuna cuatro no implementan prácticas contables tan formales y rigurosas como las propuestas en las NIIF Simplificadas, sino, que por el contrario, por tradición, comodidad y facilidad, este sector realiza una serie de prácticas que aunque carecen de soporte técnico, resultan ser suficientes y estar alineadas a sus necesidades. Adicionalmente, se realiza un llamado a enaltecer el carácter social de la contaduría pública frente a las situaciones más cotidianas de la sociedad en las cuales se aplique el saber.

Abstract:
Through a research methodology with a qualitative and inductive focus, this research explored and defined the characteristics of the generally used accounting practices by store owners in the micro establishments of District  Four of Medellin, with the aim of obtaining and consolidating concrete and empirical information of said sector, to move from intuition to a more ascertained and rigorous knowledge so as to be the basis for subsequent developments in a sector with great incidence at national level. To do this, and to achieve contextual knowledge of the study object, a description of the informal economic sector is made, and several definitions of economic, legal and accounting nature inherent to the topic are provided. Finally, it is concluded that neighborhood stores in District Four will not implement accounting practices as formal and rigorous as the ones proposed by the Simplified IFRS. On the contrary, for reasons of traditions, comfort and easiness, stores in this sector carry out a series of practices that, although lacking technical  foundations, prove to be sufficient and are aligned with their needs. Additionally, there is a call to exalt the social nature of Public Accounting in the habitual situations of society in which knowledge is applied.

As evidenced by new accounting standards, the advent of harmonization of accounting standards has caused a shift from historical basis accounting to fair value accounting. A bigger impact of this shift is manifested through revaluations and impairment. But recent events that concern complexities associated with the practical application of this standard have surfaced causing many companies to not full comply with its provisions. This study, therefore, attempts to investigate the compliance of ten selected companies belonging to the mining industry with provisions of PAS 36; and to determine existing impairment practices in the mining industry. Results reveal that selected companies belonging to the mining industry were not able to fully comply with the specific provisions of PAS 36. Implications for stakeholders are discussed and areas for future research are offered.

With the pending US adoption of International Financial Reporting Standards (IFRS) and the potential elimination of last-in-first-out (LIFO) as an accepted inventory valuation method, the use of LIFO is receiving renewed attention in the financial community. This study examines accounting distortions created by the use of LIFO inventory valuation and the materiality of these distortions on liquidity measurements. Our sample

This longitudinal study reports the impact of changes in generally accepted accounting principles on financial statement disclosures for 100 public and private institutions of higher education. Disclosures from the period when all colleges and universities followed the same accounting standards are compared with disclosures in periods after major changes in accounting and reporting standards were made by the Financial Accounting Standards Board (FASB) for private institutions and by the Governmental Accounting Standards Board (GASB) for public institutions. We find that an importance-weighted disclosure index shows that user needs are better met using the new reporting standards for public but not private institutions. An expanded unweighted index, however, shows improvement for both public and private colleges and universities. Using this disclosure index, the improvement for universities reporting under GASB standards exceeded the improvement for those reporting under FASB standards. journal ho mepage: www.elsevier.com/lo cat e/jaccpubpol 1 Of the 100 institutions included in , 90 were clearly following the AICPA audit guide, three were early adopters of SFAS No. 117 (FASB, 1993b), although not SFAS No. 116 (FASB, 1993a, and the others used either the government model or a mix of AICPA audit guide, government or other formats.

The harmonization of accounting norms is a need for the companies that operate borders beyond for the difficulty of understanding of the local norms and because of the opportunities to increase its business in another countries. However political, cultural, social and economic factors have been hindering that process, doing with that they exist, in the world, several accounting norms like