Accounting Practice Harmony, Accounting Regulation and Firm Characteristics

• Published in: Abacus (Sydney) Vol. 38; no. 1; pp. 46 - 77
• Main Authors: Rahman, Asheq, Perera, Hector, Ganesh, Siva
• Format: Journal Article
• Language: English
• Published: Oxford, UK and Boston, USA Blackwell Publishers Ltd 01.02.2002; Accounting Foundation, University of Sydney; Blackwell Publishing Ltd
• Series: Abacus
• Subjects: Accounting; Accounting procedures; Accounting standards; Auditing; Australia; Business studies; Commercial accounting; Companies; Convergence; Correlation analysis; Harmonization; Hypotheses; International relations; New Zealand; Practice; Regulation; Research review; Standards harmonisation; Studies; New Zealand; Australia
• ISSN: 0001-3072; 1467-6281
• DOI: 10.1111/1467-6281.00097

Harmonization of accounting standards has been the subject of many initiatives taken at international, regional and national levels in recent years. Policy makers advancing this idea believe that accounting regulation harmony will lead to practice harmony. The literature in the area of accounting harmonization also generally relies on a similar belief. Comparing accounting regulations and accounting practices of two countries that are pursuing a program of harmonization, Australia and New Zealand, revealed some association between the levels of regulation harmony and practice harmony. Although this indicates that regulatory harmony can improve practice harmony, the association is ‘noisy’, suggesting that there are also other factors affecting practice harmony. Evidence adduced here shows that accounting practice harmony is also associated with firm‐specific characteristics.