| Title : | Global accounting convergence and Nepal's leap from NAS to IFRS/NFRS: opportunities and challeges | | Material Type: | printed text | | Authors: | Prajwal Shrestha, Author | | Publication Date: | 2016 | | Pagination: | 64p. | | Size: | GRP/Thesis | | Accompanying material: | 5/B | | General note: | Including bibilography | | Languages : | English | | Descriptors: | Accounting
Accounting-Standards
International business enterprises-Accounting
| | Keywords: | 'acconting global accounting banks bank and banking' | | Class number: | 657.96 | | Abstract: | With globalization the behavior of doing business changed across the world. The process of financial reporting of business activities also underwent a great change. This started in 2005 when European Union made it mandatory for publicly traded companies to present consolidated financial statements in conformity with International Financial Reporting Standards (IFRS) starting from January 01, 2005 (Varghese, 2014). IFRS is a trade mark of the International Accounting Standards Committee Foundation. The main objective of International Financial reporting Standard (IFRS) is to harmonize accounting between countries which will make it easier to conduct business internationally and can subsequently raise funds in global capital market. In Nepal, The Accounting Standards Board (ASB) has prepared the road map so as to converge the Nepal Accounting Standards with International Financial Reporting Standards, which has been expected to be implemented from financial year 2013-14 onwards on phase-wise basis. For this purpose, a non-standing committee called IFRS & ISA Implementation Committee under Council of ICAN has been formed in the year 2011-12. Once these large economies converge with the IFRS, jurisdictions covering around 80 to 90 per cent of the world‘s GDP will be reporting under IFRS standards (Heidhues & Patel, 2008). Therefore, countries like Nepal too cannot afford to remain behind. Phan, Mascitelli & Barut (2011) suggested that the Vietnamese accounting professionals are optimistic about potential benefits from IFRS adoption. Their findings also indicated expected costs and challenges in implementing IFRS and suggest strong support in a gradual switch from Vietnam Accounting Standard (VAS) to IFRS. Callao et al. (2007) analyzed the financial data of Spanish firms and revealed that local comparability is adversely affected if both IFRS and local Accounting Standards are applied in the same country at the same time. Ali & Ustundag (2009) observed that Turkey has encountered several complications in adaption of IFRS such as complex structure of the International standards, potential knowledge shortfalls and other difficulties in application and enforcement issues.
The main objective of this study is to analyze the perception of Nepalese practitioner regarding various opportunities and challenges as a result of IFRS convergence in Nepal. And the specific objectives are : to analyze whether IFRS enhance accuracy and reliability in financial reporting, to identify whether inadequate training facilities is a roadblock for an effective shift from NAS to
ix
IFRS, to determine if IFRS require immediate change in Nepalese company laws and other related laws and to examine the impact of IFRS convergence on regularity oversight.
All the data required for this analytical study has been obtained mainly from primary sources. To reduce the complexity of data responses questionnaire were distributed, among those respondents only who are accounting professionals and have prior knowledge about IFRS. Besides, an effort has also been made to describe factors and other demographic characteristics of an accounting professional of 171 respondents taken from outside Nepal as well. The questions were asked in the form of Likert scale questions. The Likert scale questions of different variables were measured in 5 point scale.
This study has mainly focused on accounting professionals‘ perceptions various opportunities and challenges as a result of IFRS convergence. As per the survey, most of the respondents (68.4 percent) are ready for the change in accounting practices due to convergence with IFRS. The result shows that majority of the respondents (98.8 percent) think that IFRS is more advantageous than previous NAS followed by only 1.2 percent of the respondents who do not believe IFRS to be more advantageous than previous NAS. The study also showed shows that majority of the respondents (95.3 percent) think that adoption of IFRS is must for MNCs than domestic companies.
The study concludes that all the variables of opportunities and challenges have positive and significant relationship with perceived opportunities and perceived challenges respectively. This study has used opportunities dimensions like accuracy and reliability, comparability, better corporate governance, harmonization, effective regulatory oversight and capital market regulation. Also this study has used challenges dimensions like inadequate training, insufficient preparatory period, work & burden, timely communication, immediate change in related laws and cultural impact. The study showed positive and significant relationship of these opportunity variables with perceived opportunity. Hence, study shows that IFRS/NFRS convergence brings opportunities as Nepalese accounting professionals perceive. All the challenge variables too showed positive and significant relationship with perceived challenges. It indicates that IFRS/NFRS convergence brings significant costs and challenges during the IFRS transition process as anticipated by Nepalese accounting professionals. |
Global accounting convergence and Nepal's leap from NAS to IFRS/NFRS: opportunities and challeges [printed text] / Prajwal Shrestha, Author . - 2016 . - 64p. ; GRP/Thesis + 5/B. Including bibilography Languages : English | Descriptors: | Accounting
Accounting-Standards
International business enterprises-Accounting
| | Keywords: | 'acconting global accounting banks bank and banking' | | Class number: | 657.96 | | Abstract: | With globalization the behavior of doing business changed across the world. The process of financial reporting of business activities also underwent a great change. This started in 2005 when European Union made it mandatory for publicly traded companies to present consolidated financial statements in conformity with International Financial Reporting Standards (IFRS) starting from January 01, 2005 (Varghese, 2014). IFRS is a trade mark of the International Accounting Standards Committee Foundation. The main objective of International Financial reporting Standard (IFRS) is to harmonize accounting between countries which will make it easier to conduct business internationally and can subsequently raise funds in global capital market. In Nepal, The Accounting Standards Board (ASB) has prepared the road map so as to converge the Nepal Accounting Standards with International Financial Reporting Standards, which has been expected to be implemented from financial year 2013-14 onwards on phase-wise basis. For this purpose, a non-standing committee called IFRS & ISA Implementation Committee under Council of ICAN has been formed in the year 2011-12. Once these large economies converge with the IFRS, jurisdictions covering around 80 to 90 per cent of the world‘s GDP will be reporting under IFRS standards (Heidhues & Patel, 2008). Therefore, countries like Nepal too cannot afford to remain behind. Phan, Mascitelli & Barut (2011) suggested that the Vietnamese accounting professionals are optimistic about potential benefits from IFRS adoption. Their findings also indicated expected costs and challenges in implementing IFRS and suggest strong support in a gradual switch from Vietnam Accounting Standard (VAS) to IFRS. Callao et al. (2007) analyzed the financial data of Spanish firms and revealed that local comparability is adversely affected if both IFRS and local Accounting Standards are applied in the same country at the same time. Ali & Ustundag (2009) observed that Turkey has encountered several complications in adaption of IFRS such as complex structure of the International standards, potential knowledge shortfalls and other difficulties in application and enforcement issues.
The main objective of this study is to analyze the perception of Nepalese practitioner regarding various opportunities and challenges as a result of IFRS convergence in Nepal. And the specific objectives are : to analyze whether IFRS enhance accuracy and reliability in financial reporting, to identify whether inadequate training facilities is a roadblock for an effective shift from NAS to
ix
IFRS, to determine if IFRS require immediate change in Nepalese company laws and other related laws and to examine the impact of IFRS convergence on regularity oversight.
All the data required for this analytical study has been obtained mainly from primary sources. To reduce the complexity of data responses questionnaire were distributed, among those respondents only who are accounting professionals and have prior knowledge about IFRS. Besides, an effort has also been made to describe factors and other demographic characteristics of an accounting professional of 171 respondents taken from outside Nepal as well. The questions were asked in the form of Likert scale questions. The Likert scale questions of different variables were measured in 5 point scale.
This study has mainly focused on accounting professionals‘ perceptions various opportunities and challenges as a result of IFRS convergence. As per the survey, most of the respondents (68.4 percent) are ready for the change in accounting practices due to convergence with IFRS. The result shows that majority of the respondents (98.8 percent) think that IFRS is more advantageous than previous NAS followed by only 1.2 percent of the respondents who do not believe IFRS to be more advantageous than previous NAS. The study also showed shows that majority of the respondents (95.3 percent) think that adoption of IFRS is must for MNCs than domestic companies.
The study concludes that all the variables of opportunities and challenges have positive and significant relationship with perceived opportunities and perceived challenges respectively. This study has used opportunities dimensions like accuracy and reliability, comparability, better corporate governance, harmonization, effective regulatory oversight and capital market regulation. Also this study has used challenges dimensions like inadequate training, insufficient preparatory period, work & burden, timely communication, immediate change in related laws and cultural impact. The study showed positive and significant relationship of these opportunity variables with perceived opportunity. Hence, study shows that IFRS/NFRS convergence brings opportunities as Nepalese accounting professionals perceive. All the challenge variables too showed positive and significant relationship with perceived challenges. It indicates that IFRS/NFRS convergence brings significant costs and challenges during the IFRS transition process as anticipated by Nepalese accounting professionals. |
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