Comparative International Accounting 14th Edition

Book Preface

Purpose
Comparative International Accounting is intended to be a comprehensive and coherent text on international financial reporting. It is primarily designed for undergraduate and postgraduate courses in comparative and international aspects of financial report-ing. A proper understanding requires broad overviews (as in Part I), but these must be supported by detailed information on real countries and companies (as in Parts II to IV) and across-the-board comparisons of major topics (as in Parts V and VI).
This book was first published in 1981. Until this present edition (the fourteenth), the book was jointly written by Christopher Nobes and Robert Parker. However, Bob Parker died shortly after the thirteenth edition was published in 2016. This edition is dedicated to his memory; see obituaries in the 2016 volumes of Accounting and Business Research and Accounting History. Bob’s last publication was a review of the development of the contents of this book (and therefore of the world of international accounting) over its thirteen editions from 1981 onwards. Readers can consult this in Volume 21 (Issue 4) of Accounting History.
This edition is a complete updating of the thirteenth edition. For example, since that edition, the International Accounting Standards Board (IASB) issued a revised Concep-tual Framework in 2018; many Japanese companies have volunteered to adopt Interna-tional Financial Reporting Standards (IFRS); major new standards on lease accounting have been issued by the IASB and in the United States (thereby creating new interna-tional differences); and much relevant academic literature has been published.

In addition to the extensive updating, I have also:

● added a discussion of international differences in public sector accounting (in Chapter 4); and
● completely re-arranged the material on the content of IFRS (by reworking the mate-rial previously in Chapters 6, 9 and 16 as the new topic-focused Chapters 6, 7 and 8). A revised manual for teachers and lecturers is available from go.pearson.com/uk/he/resources. It contains several numerical questions and a selection of multiple-choice questions. Suggested answers are provided for all of these and for the questions in the text. In addition, there is now an extensive set of PowerPoint slides.
Authors
In writing and editing this book over many editions, Bob Parker and I tried to gain from the experience of those with local knowledge. This is reflected in the nature of those thanked below for advice and in the note on contributors. For example, the original chapter on North America was co-authored by a Briton who had been assistant research director of the US Financial Accounting Standards Board; his knowledge of US accounting was thus interpreted through and for non-US readers. The amended version of the US chapter is by this book’s author, who has taught in several US uni-versities. This seems the most likely way to highlight differences and to avoid missing important points through overfamiliarity. The chapter on political lobbying is written by Stephen Zeff, an American who is widely acknowledged as having the best overview of historical and international accounting developments. The original chapter on cur-rency translation was written by John Flower, who taught in UK universities but then worked in Brussels for the EU Commission, and now lives in Germany. The chapter on auditing has been written and revised by those directly involved in international audit regulation and practice.
The two original main authors had, between them, been employed in nine coun-tries. Christopher Nobes currently holds university posts in Australia and the UK.
Structure
Part I sets the scene for a study of comparative international financial reporting. Many countries are considered simultaneously in the introductory chapter and when exam-ining the causes of the major areas of difference (Chapter 2). It is then possible to try to put accounting systems into groups (Chapter 3) and to take the obvious next step by discussing the purposes and progress of international harmonisation of financial reporting (Chapter 4).
All this material in Part I can act as preparation for the other parts of the book. Part I can, however, be fully understood only by those who become well informed about the contents of the rest of the book, and readers should go back later to Part I as a summary of the whole.
Part II examines financial reporting by listed groups. In much of the world this means, at least for consolidated statements, using the rules of either the International Accounting Standards Board or the United States. There are three chapters on the main requirements of IFRS, written in an internationally comparative way. Then, Chapter 9 examines whether different national versions of IFRS exist. After that, Chapter 10 com-pares US GAAP with IFRS, and Chapter 11 examines political lobbying about account-ing standards.
Part III of the book deals with financial reporting in the world’s second and third largest economies (China and Japan). They share much in common, including having Roman-based commercial legal systems and having requirements for the consolidated statements of listed companies that are separate from those for other types of report-ing. Neither country directly imposes IFRSs or US GAAP, although the influences of those systems have been strong. It is therefore clearer to deal with these major coun-tries (as we do in Chapter 12) separately from those countries using IFRS or US GAAP.
Part IV concentrates on the point raised above: that many countries have separate national rules for unlisted companies or unconsolidated statements. Chapter 13 exam-ines a number of issues relating to the context of reporting by individual companies, for example the relationship between accounting and tax. It also looks at the IFRS for SMEs. Chapters 14 to 16 concentrate on Europe, where the world’s next three largest economies (after the US, China and Japan) are located. EU harmonisation is studied in Chapter 14. Then, Chapters 15 and 16 look at the making of the rules for reporting by individual companies in France, Germany and the UK, and at the content and exercise of those rules.
Part  V (Chapters  17 and 18) examines, broadly and comparatively, two major accounting topics for multinational companies: foreign currency translation and seg-ment reporting. Part VI (Chapters 19 and 20) looks at two matters that come at the end of the financial reporting process: external auditing and the enforcement of the rules.
At the end of the book, there are three appendices: a synoptic table of accounting differences across eight GAAPs, a glossary of abbreviations relevant to international accounting, and suggested outline answers to some end-of-chapter questions. Finally, there are two indexes: by author and by subject.
Acknowledgements
In the various editions of this book, we have received great help and much useful advice from many distinguished colleagues in addition to our contributors. We espe-cially thank Sally Aisbitt (deceased); Ignace de Beelde of Ghent University; Dr Ataur Rahman Belal, Aston Business School, Aston University; Véronique Blum of Univer-stité Grenoble Alpes; Andrew Brown of Ernst & Young; Emmanuel Charrier of Paris Dauphine; John Carchrae of the Ontario Securities Commission; Terry Cooke of the University of Exeter; John Denman and Peter Martin of the Canadian Institute of Chartered Accountants; Brigitte Eierle of Bamburg University; Sheila Ellwood of the University of Bristol; Maria Frosig and Niels Brock of Copenhagen Business School, Denmark; Simon Gao of Edinburgh Napier University; Michel Glautier of ESSEC, Paris; Christopher Hossfeld of ESCP, Paris; Dr Jing Hui Liu, University of Adelaide, Australia; Horst Kaminski, formerly of the Institut der Wirtschaftsprüfer; Jan Klaassen of the Free University, Amsterdam; Christopher Koch of the University of Mannheim; and Stéphanie Tulleau Kontowicz of the University of Bordeaux; Yannick Lemarchand of the University of Nantes; Ken Lemke of the University of Alberta; Klaus Machar-zina of the University of Hohenheim; Rania Uwaydah Mardini of Olayan School of Business, American University of Beirut; Malcolm Miller and Richard Morris of the University of New South Wales; Geoff Mitchell, formerly of Barclays Bank; Jules Muis of the European Commission; Ng Eng Juan of Nanyang Technological University of Singapore; Sue Newberry of the University of Sydney: Graham Peirson of Monash University; Sophie Raimbault of Groupe ESC, Dijon; Jacques Richard of the University of Paris Dauphine; Alan Richardson of York University, Toronto; Alan Roberts of ESC Rennes School of Business; Paul Rutteman, formerly of EFRAG; Etsuo Sawa, formerly of the Japanese Institute of Certified Public Accountants; Hein Schreuder, formerly of the State University of Limburg; Marek Schroeder of the University of Birmingham; Patricia Sucher, formerly of Royal Holloway, University of London; Christian Stadler of the University of Lancaster; Lorena Tan, formerly of Price Waterhouse, Singapore; Ann Tarca of the University of Western Australia; Stéphane Trébucq of the University of Bordeaux; Peter van der Zanden, formerly of Moret Ernst & Young and the University of Tilburg; Gerald Vergeer of Moret Ernst & Young; Ruud Vergoossen of Royal NIVRA and the Free University of Amsterdam; Jason Xiao, Cardiff University; Dr Yap Kim Len, HELP University College, Malaysia; and Eagle Zhang of the University of Sydney. We are also grateful for the help of many secretaries over the years.

For this fourteenth edition, Stephen Zeff provided much useful advice on large parts of the draft. Despite the efforts of all these worthies, errors and obscurities will remain, for which I am culpable.

Christopher Nobes Royal Holloway
(University of London), and University of Sydney