Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems
Journal of Finance and Accounting
Volume 8, Issue 1, January 2020, Pages: 48-58
Received: Dec. 19, 2019;
Accepted: Feb. 7, 2020;
Published: Feb. 18, 2020
Views 284 Downloads 226
Irina Golochalova, Department of Accounting and Economic Informatics, Moldova State University, Chisinau, Republic of Moldova
Viorel Tsurcanu, Department of Accounting, Auditing and Economic Analysis, Academy of Economic Studies of Moldova, Chisinau, Republic of Moldova
The purpose of this study is to establish the ability to assess the quality of financial statements presented by organizations in a particular jurisdiction. The preparation of useful financial statements is possible based on the imperativeness of the concept of qualitative characteristics. An analysis of the composition and grouping of qualitative characteristics outlined in the Conceptual Framework for Financial Reporting, Directive 2013/34/EU and the Law of the Republic of Moldova (RM) “On Accounting and Financial Reporting” made it possible to choose a method for developing a unified methodology for assessing quality of financial reporting in relation to accounting systems, both Anglo-Saxon and continental, as well as individual jurisdictions. A statement of the leading role of reliability and relevance in determining the usefulness of information, while maintaining the value of qualitative characteristics that increase the usefulness of information (in particular, comparability and timeliness), provided the opportunity to build a rational methodology for measuring the quality of financial statements. The proposed methodology is considered as the basis for assessing the quality of reporting, in the framework of which the value of the indicator of useful information is postulated. Based on mathematical modeling, a formula has been developed for calculating the indicator of the usefulness of information, with perfectly prepared financial statements, the value of which is 1. The use of the method of abstraction and logical thinking allowed us to determine the value of each qualitative characteristic in the quality indicator. It has been established that deviations from this indicator can be the result of either non-compliance with the information quality requirements by the reporting compiler, or ignoring the conceptual platform for presenting useful financial statements. Countries associated with the EU, including the RM, are forced to use a mixed system of accounting and qualitative characteristics (according to International Financial Reporting Standards and Directive 2013/34/EU). The implementation of the recommended methodology for measuring the quality of reporting, using the qualitative characteristics provided for in the legislative framework of the RM, proves the inefficiency of convergence of the two accounting systems in the absence of a special methodology. In general, the study demonstrated that the effective use of the concept of qualitative characteristics: is aimed at promoting the harmonization of accounting systems; serves as a reliable basis for assessing the quality of financial statements; contributes to solving the problem of improving the quality of information in the future.
Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems, Journal of Finance and Accounting. Special Issue: Financial Inclusion , Accounting Perspectives and Development.
Vol. 8, No. 1,
2020, pp. 48-58.
Tsygankov, Kim, Fadeikina, Natalia. Conceptual Bases of Financial Statements: Qualitative Characteristics// Finance and Accounting, 2016, No. 4, pp. 98-105, retrieved from: http://elibrary_2673279458.pdf.
Achim, Andra M., Chish, Anca, O. Financial accounting quality and its defining characteristics/Practical Application of Science, 2014, vol. II, iss. 3 (5), pp. 93-98, retrieved from: https://seaopenresearch.eu/SPAS_5_13.
Kruglyak, Zinaida, Shvyreva, Olga. Development the System of Qualitative Characteristics of Financial Information //International Accounting, 2017, Vol. 20. Iss. 18. pp. 1051-1065, retrieved from: http://doi.org/10.24891/ia.2018/1051.
Tabara, Neculae. Comparative accounting systems, edition of П revised and supllemented. Iasi, 2014, Tipo Moldova Publishing House.
International Accounting Standard 1 «Presentation of Financial Statements», retrieved fromhttp://ec.europa.eu/docs/arc/ias1_ann.
Conceptual Framework for Financial Reporting [online], retrieved from: http://www.ctcp.gov.co/_files/documents.
Directive 2013/34/EU of European Parliament and of the Council of 26 June 2013 'On the annual financial statements, consolidated financial statements and related reports of certain types of undertakings', retrieved from: http://eur-lex.europa.eu/LexUriServ\.
Tsurcanu, Viorel, Golochalova, Irina. Accounting truth and its assurance in entities from the Republic of Moldova, Audit Financial, vol. XIV, no. 7 (139)/2016, pp. 769-780, retrieved from: https://revista.cafr.ro/RevistaDetalii_EN ?Cod=1070, DOI: 10.20869/AUDITF/2016/139/769.
Feleaga, Neculae. Comparative accounting systems, edition of П, а vol. П - International accounting standards. 1999, Economic Publishing House.
Pyatov, Мikhail, Smirnova, Irina. Conceptual Framework of International Accounting Financial Reporting, 2008, «1с-Publishing» Publishing House.
Colasse, Bernard. Basic of Accounting (translated N. Tabara). Iasi, 2009, Publish. Tipo Moldova.
Alexander, David, Britton, Anne, Iorisen, Enn. International Financial Reporting Standards: from theory to practice, Moscow, 2005, Vershina Publishing House.
Sokolov, Yaroslav, Terentyeva, Tatyana. Accounting and Auditing: Modern Theory and Practice, St. Petersburg, 2009, Economy Publishing House.
Alekseev, M., Glinskiy, V., Serga, L., Pyatov, M. On Evaluating Likely Misstatements in Financial Statements of Economic Entities. Issues Statistics, 2019, 26 (7), pp. 20-32, retrieved from: https://voprstat.elpub.ru/jour/article/view/934, https://doi.org/10.34023/2313-6383-2019-26-7-20-32.
Tsurcanu, Viorel, Golochalova, Irina. Accounting in Republic of Moldova between IFRS and EU Directives. Collection of Articles Selective, Vol. 4, of 23-24 September 2016, Publishing House ASEM, pp. 200-206, retrieved from: https://ase.md/publicatii-electronice.html.
Richard, Jacques. Accounting: Theory and Practice. Moscow, 2000: Finance and Statistics.
Beest van Ferdy, Braam, Geert, Boelens, Susanne. Quality of Financial Reporting: measuring qualitative characteristics, 2009, retrieved from: http://www.ru.nl/nice/workinqpapers.
Nobes, Christofer, W., Stadler, Chistian. The Qualitative Characteristics of Financial Information, and Managers’ Accounting Decisions: Evidence from IFRS Policy Changes, 2015, retrieved from: https://doi.org/10.1080/00014788.2015.1044495.
Dmour, Ahmad, Dmour, Hani, Abbod, Maysam, F. Qualitative Characteristics of Financial Reporting and Non-Financial Business Performance, 2017, retrieved from: https://www.researchgate.net/publication/324494814_, DOI/10.4018/IJCFA.2017070101.
Shalimova, Nataliia, Kuzmenko, Halyna. Information Transparency of the Activity of the Enterprise as Taxpayer: Science Review. Economy 1 (8), Vol. 4, January 2018, retrieved from: https://www.academia.edu/37855386/.
Kolesnikov, V., Makarov, I., Safarova, A. Economic and Mathematical Modeling of the Audit Assessment of the Effectiveness of Accounting Information, 2017, retrieved from: https://cyberleninka.ru/article/n/economiko-matematicheskoe
Amendments to IAS 1 and IAS 8. “Definition of Material” retrieved from: http://www.iasplus.com/en/news/2018/10/definition-of-material.
Needles, Belverd, E., Anderson, Henry, R., Caldwell, James, C. Principles of Accounting, Moscow, 1999: Finance and Statistics.
Hendriksen, Eldon S., van Breda, Michael F. Accounting Theory. – Moscow, 2000: Finance and statistics.
Plakhtiy, Tatyana. Historical Analysis of Development of Concept of Qualitative Characteristics of Accounting Information//Accounting and Finance, 2016, No. 4, pp. 60-68, retrieved from: http://www.afj.org.ua/ru/article/428/.
Conception of reform of the Accounting, Government Degree No. 1187 of December 24, 1997 RM, retrieved from http://lex.justice.md/document_rom.php?id.
Law No. 113-XVI of April 27, 2007, of the Republic of Moldova „On Accounting”, retrieved from http://lex.justice.md/viewdoc.php?action=view&view=doc&id=351443&lang2=1.
National Accounting Standards “Presentation of Financial Statements”, approved by Order of the Ministry of Finance No. 118 from August 06, 2013, with modification 01.01.2019, retrieved from: http://www.old.mf.gov.md/actnorm//contabil/stantard/new.
Law No. 287 of December 15, 2017 of the Republic of Moldova, On Accounting and Financial Reporting”, retrieved from http://lex.justice.md/viewdoc.php?action=view&view=doc&id=363701&lang2.
Grigoroy, Lilia, Muntean, Neli. The Innovative Experience of the Republic of Moldova in Reforming the Accounting System and its Harmonization with IFRS and European Directives. Marketing and Management of Innovations, 2019, Issue 1, retrieved from: http://doi.org/10.21272/mmi.2019.1-27.