The economics of jurisdictional exceptions to International Financial Reporting Standards and the effects on comparability of financial information
I remember in Introduction to Microeconomics when Dr.
Boudreaux joked that if you were having trouble falling asleep, you should pick
up and read an economics textbook and that would take care of the problem…I
laughed then, but ultimately, I found that the relationship of economics to
daily life was pretty interesting! My research topic is interdisciplinary in
nature, and I am using the lense of economics to scrutinize and evaluate an
accounting topic, which is how the information in financial statements is
affected by economic factors. The goal of my research is to assess if there is
relationship between a country’s main industries and any changes that they made
to International Financial Reporting Standards (IFRS) when the country adopted
the standards. Due to the nature of our global economy, adoption of IFRS is
expected to make comparisons easier between companies from different countries
since the financial reporting rules would be the same; however, the question is
whether inconsistently applied rules affects comparability. In the US, this
topic is relevant since the Securities and Exchange Commission is evaluating
whether or not to adopt IFRS.
The research process
has been exciting and challenging. Early in the semester I met with my academic
mentor, Dr. J. K. Aier, to establish a plan to accomplish the background
research, data collection and analysis, and presentation preparation. At this
point, the background research is substantially finished. This week, I have continued
working to find specific data relating to the processes used by countries to
adopt IFRS, and also, whether they fully adopted all of the standards. At
times, I have felt like a super-sleuth when my search queries have yielded
exactly what I wanted to find – and then, there have been other times when I
can’t seem to phrase the search terms in that magical way that returns anything
worth using. This project has taught me the importance of documenting searches
that are productive so that I can try variations of them, and, also which
databases are especially relevant in my disciplines. Another particularly
helpful resource is Jo Ann Henson, who is the GMU library liaison for the
business disciplines; her suggestions and assistance have enhanced my
productivity. With data collection winding down, I am looking forward to
focusing on analysis in the next project phase.
