What is it about?
Implementation errors are made when accounting standards are implemented for the first time. The paper examines the causes and consequences of reporting these implementation errors.
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Why is it important?
This is one of the first studies that examines the implementation issues associated with the adoption of a new set of accounting standards. Understanding the causes of these errors is important as these errors reduce the potential benefits of the new accounting standards. The study also show that there are costs associated with reporting these errors in terms of an increase in information asymmetry and audit costs.
Perspectives
This study highlights that the benefits of new accounting standards are not only based on the quality of these standards but how these standards are implemented. Our results highlight that there is a learning process and as such accounting standard setters should consider early voluntary adoption and allow for a longer learning period. When the accounting standards are implemented with errors, it is costly to the firm (increase information asymmetry and audit costs).
Dr Anna A L Loyeung
University of Technology Sydney
Read the Original
This page is a summary of: The cost of implementing new accounting standards: The case of IFRS adoption in Australia, Australian Journal of Management, September 2016, SAGE Publications,
DOI: 10.1177/0312896216649015.
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