Financial Accounting Developments in the European Union: Past Events and Future Prospects

Posted: 21 Jan 2002

See all articles by Axel Haller

Axel Haller

University of Linz - Institut für Revisions, Treuhand-und Rechnungswesen

Abstract

The decision of the Commission of the European Union (EU) to oblige listed European companies, from 2005 onwards, to establish their consolidated financial statements according to IFRS (IAS) represents a preliminary peak in the internationalisation process of financial accounting in Europe. The purpose of this paper is to highlight the landmarks of accounting developments in the EU since the 4th and 7th Directive and to reveal the obvious internationalisation process of financial accounting in the EU, which has accelerated considerably during the last ten years. Due to the considerable pressures exerted by market forces, a clear convergence of accounting practice as well as of the regulatory frameworks of the EU and its member states with IFRS (IAS) is recognisable. The harmonization effects of the market forces on national regulators and companies appear to be much larger than those of the 4th and 7th Directive. In addition to the explanation and reasoning behind past developments, this paper also discusses some future prospects of financial reporting within the EU and identifies some of its major challenges.

JEL Classification: M40, M41

Suggested Citation

Haller, Axel, Financial Accounting Developments in the European Union: Past Events and Future Prospects. Available at SSRN: https://ssrn.com/abstract=297388

Axel Haller (Contact Author)

University of Linz - Institut für Revisions, Treuhand-und Rechnungswesen ( email )

Altenberger Strasse 69
A-4040 Linz
Austria

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