Toward a Consistent Application of International Financial Reporting Standards (IFRSs) across Companies and Countries

International Financial Reporting Standards (IFRSs) were developed to be a single set of high-quality globally accepted accounting standards. They are meant to allow uniformity in financial reporting, enhance comparability of financial statements in the midst of economical globalization, and allow companies with international subsidiaries to prepare their financial statements using similar global standards.
The objective of the dissertation is to study whether the application of IFRSs is consistent across companies and countries; in particular we tackle the following two questions:
-Does the application of IFRSs in the preparation of financial statements lead to consistency?
-Does the public enforcement of accounting standards impact the consistent application of IFRSs?
To answer the first question we have addressed standard IAS 36 that was developed by the International Accounting Standards Board (IASB) and covering impairment of assets. We found that managers’ opportunism still has an impact on the impairment of assets recognition and magnitude when taking impairment decisions.
To address the second question, a survey covering enforcement of accounting standards activities was prepared and sent to public enforcement bodies in a number of countries mandating the adoption of IFRSs. The survey allowed us to construct an index that represents the activities of the public enforcement bodies. We studied the impact of public enforcement on specific applications of the standards, the results show a decrease in earnings management in countries with effective public enforcement.