ACFI3217 ESSAY – IFRS Convergence Issues

Essay theme
It is argued that even after a decade-and-half long period of their being “adopted” in Europe, the
“convergence” to the International Financial Reporting Standards (IFRSs) remain challenging for
many countries outside Europe.
You are required, considering the above claim, write an ESSAY of about 1,250 word-length
discussing critically why this has been the case. To make your essay more focussed in orientation,
you may choose any ONE of the following countries (see below) discussing clearly why there
remains significant challenges for the country you chose to fully converge to the IFRSs.
• India
• Japan
• Egypt
For a coherent writing (the chosen country for this essay), you may wish to consider the critical
factors such as (1) Culture and Religion, (2) Economic history, (3) Political motivation, and (4)
Business and or Financial Markets from a regulatory perspective;

Introduction (briefly giving reason(s) for selecting the country for your essay) 10%
Relevant literature discussion/review (critical factors for adoption/convergence to the IFRSs)
40%
Discussion (theoretical/empirical) Issue(s) for stakeholders (global/local) (evidenced by literature)
30 %
Conclusion (with logical reasoning and analysis.) 10%
• Overall Structure, Harvard Referencing, etc.

 

The following could be taken as guidance to develop your essay from an academic quality
perspective. You may “title” your essay and show the following structure indicating the wordlength for each section clearly at the end of that section. (The sample below discusses Japan
as a choice of study. But you could well choose the one you can explore and write very well.)
(1) Introduction (This has a 10% weightage)
In this section, you will introduce the topic theme in a clear manner. For example, you may guide
your reader – (See how the writer of this essay has “introduced briefly the theme (of “IFRS” and
“convergence”) and clearly reflected/reasoned the motivation to choose Japan as the main study
for this essay!):
The International Accounting Standards Board (IASB) sets the global accounting standards known
as International Financial Reporting Standards (IFRSs). The IFRSs are mandated by the European
Union in the form of “adoption” in order to standardise/harmonise the financial reporting
practice of public listed entities in the whole of Europe. However, this objective, since 2005, has
crossed the frontiers of Europe requiring other countries to either adopt or converge to the IFRSs
(Perry and Nolke, 2006, p560; Ball, R, 2006, p5). Although ambitious a project in scale and size,
however, the “convergence” to the IFRSs has not been fully accomplished in many countries. In
this essay, I will aim to explore and discuss the current position of the IFRS convergence in Japan
and some of the reasons as to why it chose to use convergence over adoption as the best way to
harmonise its financial reporting regulation. So, what is so unique about Japan’s financial reporting
system? Perhaps its culture of collective management that helps the economic growth of its local
and domestic industry.
(above word length is 172 words. This covers one-half A4 page when double-spaced)
(2) Relevant Literature discussion/review (This has a 40% weightage)
In this section, you should be able to discuss the various/critical factors that governs the Japanese
economy and the corporate entities in terms of financial reporting and business practices etc. Some
example (e.g., traditional, rudimental, modern, and one that may have been influenced by some
events/agreements- political, trade, taxation, economic, etc.) that shows a stark or clear difference
in the trend with the existing international regime of financial reporting. Your discussion should
chiefly focus on the available literature on IFRS convergence in Japan and other countries. In order
that your discussion is coherent enough, you should be able to reflect/identify certain theories in
support/against the IFRS convergence. You can show this by relevant examples demonstrating to
some extent, a deeper and or providing some useful “insight(s)” about Japan’s financial reporting
system for your reader.
(expected word length is 600-625 words. This covers about two-and-half A4 pages when doublespaced)
(3) Discussion (theoretical/empirical) (This has a 30% weightage)
Building on the above section, you should focus on certain important issues in Japan chiefly,
drawing attention to the various debates, noises, concerns raised by stakeholders including
policymakers and professional bodies. Any relevant and or latest news would be helpful to
demonstrate the politics or strategy initiated by the country; how and why? Care should be taken
that you do not reproduce the work, but you must “synthesise” it showing “your understanding”
of the relevant points.
As an engaged discussion strategy, you can support your discussion by good examples and or some
useful empirical data which may be help explain the position of convergence to the IFRSs (e.g., in
terms of the pros and cons of IFRSs) for the Japanese economy. For instance, some specific but
important accounting is undertaken differently than the IFRS. Example(s) might show treatment in
respect of (1) Goodwill; (2) Financial Instruments accounting (3) long-term biological assets,
(4) pensions, (5) revenue recognition, (6) dividend payment, etc;
(expected word length 350-400 words. This covers one-and-three quarters A4 pages when doublespaced)
(4) Conclusion (This has a 10% weightage)
In this section, you should be able to summarise your study providing some logical arguments
and discussion of the work on the whole. For instance,
The IFRS convergence project in Japan indeed has been more of a delayed work since the
Japanese government took a good review of the ………… which clearly suggest…. that (1)
Japanese culture of …. and the (2) various…… …, and (3) ….. This means that for Japan
(especially for its domestic companies…..it will prove….) Also, the changes in IFRSs in Europe
and elsewhere, Japanese policymakers apparently has taken a cautious, but systematic steps,
strategically speaking, in managing its socioeconomic activities.
(expected word length 150-175 words. This covers one-half A4 page when double-spaced)

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