اندازه گیری همگرایی استانداردهای حسابداری ملی با استانداردهای گزارشگری مالی بین المللی: کاربرد تجزیه و تحلیل خوشه ای فازی

A single set of accounting standards is considered the path to achieving accounting convergence globally. Given the important role that formal harmonization/convergence plays in the accounting profession and global capital markets, this study focuses on the methods and methodology for the measurement of formal accounting convergence. Based on our review and evaluation of the existing methods for measuring the level of harmonization/convergence between any two sets of accounting standards, we propose using a new method of matching and fuzzy clustering analysis to assess the convergence progress of national accounting standards (NAS) with International Financial Reporting Standards (IFRS) from whole and single standards, respectively. Single standards are clustered according to their convergence level, which may indicate further convergence emphasis. As an illustrative example, the achievements made in China are evaluated using this new method. The results reveal that this new method can measure the convergence level of NAS with IFRS more clearly and informatively.

The globalization of the world's economy has inevitably resulted in efforts to establish a single set of financial reporting standards, which is considered the path to achieving accounting convergence globally. In May 2000, the International Organization of Securities Commissions (IOSCO) completed the assessment of the International Accounting Standards Committee (IASC) core standards, including their related interpretations (the IASC, IAS2000). Members of IOSCO were encouraged to use the IASC standards to prepare their financial reporting for cross-border offerings and listings, supplemented where necessary to address outstanding substantive issues at a national or regional level, or to use waivers of particular aspects of IASC standards without requiring further reconciliation under exceptional circumstances. In 2001, after its reconstruction, the International Accounting Standards Board (IASB) adopted objectives2 for developing and promoting the use and rigorous application of a single set of global accounting standards. Numerous countries and regions obliged or volunteered to accept completely or reconcile its NAS to international standards. Since 2005, listed companies in EU countries have been required to adopt IFRS for preparing their consolidated financial statements, and non-listed companies are encouraged to do so as well. In addition, financial statements ended after November 15, 2007 and prepared using IFRS by foreign private issuers in the United States have been accepted without reconciliation to U.S. generally accepted accounting principles (GAAP). By March 2008, 110 countries and regions had accepted IFRS completely or had set their NAS based on IFRS. Some of these countries, such as Australia, have directly converged their accounting model with IFRS, while some others have not because of environmental differences or legal processes. China, a member of the IASB, is a country that has made progress toward convergence. On February 15, 2006, the Ministry of Finance issued a new set of accounting standards, which includes 1 fundamental standard and 38 specific standards. A joint statement3 issued by the IASB and the China Accounting Standards Committee states that China has achieved substantial progress toward convergence with IFRS, although some differences remain (e.g., reversal of impairment losses, disclosure of related party relationships, and transactions). These new accounting standards were implemented for Chinese-listed companies beginning January 1, 2007. Implementation for large and mid-sized state-owned companies and other types of companies is expected to be ongoing. Despite the progress, significant differences from IFRS still exist in many national accounting systems. And even for those countries that have adopted IFRS directly, certain differences may still exist during the implementation of the standards. It is generally accepted that standards are not only the means of achieving the convergence of financial reports but also one of the objectives of convergence. In such circumstances, and given the important role of formal convergence, reliable measurements of the progress in achieving convergence are critical. Extant research in the evaluation of accounting convergence has mainly focused on the measurement of material convergence, while the methods and methodology for the measurement of formal harmonization are scarce and inconsistent. This study explores the method and methodology for measuring formal convergence and proposes a new method of matching and fuzzy clustering analysis to assess the convergence progress of NAS with IFRS from the perspectives of whole and single standards. As an example, the convergence of the latest China's accounting standards (CAS) with IFRS will be evaluated using this new method. We expect that this study could offer a more effective method to measure the convergence of NAS with IFRS clearly and informatively and could advance the study of formal convergence. This could benefit the globalizing capital markets and other users of financial reporting in helping them to assess the quality and comparability of the financial information provided by local and cross-bounder-listing and issuing companies. For clarity, it is necessary to define the key terms used throughout this research. First, we need to differentiate the meanings of harmonization, standardization, and convergence so as to understand the target of our measurement. Van der Tas (1988) originally defined harmonization as “a coordination, a tuning of two or more objects.” Tay and Parker (1990) made a further differentiation between harmonization and harmony, standardization, and uniformity. Harmonization is a process of “a movement away from total diversity of practice. Harmony (a state) is therefore indicated by a ‘clustering’ of companies around one or a few of the available methods.” Standardization is conceived to be a process of “a movement towards uniformity (a state). It includes the clustering associated with harmony, and reduction in the number of available methods. Harmony and uniformity are therefore not dichotomous. The former is any point on the continuum between the two states of total diversity and uniformity” ( Tay & Parker, 1990). “Convergence” is the act of moving toward one point, especially moving toward union or uniformity. 4 The destination of both standardization and convergence is uniformity. Similar to harmony and uniformity, the relationship of harmony and convergence is also not dichotomous. These terms reflect the subtleties of international accounting standards development at different stages. In fact, the IASB's development and promotion of a single set of accounting standards indicates a movement from international harmonization toward global convergence. This convergence could also be considered a standardization process. Both the degree of harmonization and the degree of convergence reveal the progress made in the accounting internationalization process. Second, we need to distinguish between formal harmonization and material harmonization. There is consensus that accounting harmonization includes accounting standards harmonization and accounting practice (financial reporting) harmonization. Accounting standards harmonization refers to harmonization between regulations, called formal or de jure harmonization. Accounting practice harmonization refers to the similarity of financial information prepared by companies using either the same or different set of accounting standards, and it is called material or de facto harmonization. Formal accounting harmonization is considered the basis for achieving material accounting harmonization. Material accounting harmonization could not be achieved without formal accounting harmonization. Given the importance of formal accounting harmonization, we focus on measuring the convergence of accounting standards, regardless of whether such standards are followed in practice or not (the convergence of accounting practice could be measured by using other appropriate methods). The methods employed in this study are those most suitable to the features of accounting standards. With these terms defined, we begin the study by reviewing the methods in existing literature in order to measure the success achieved in effecting convergence between any two sets of accounting standards. We then propose and demonstrate matching and fuzzy clustering analysis methods for assessing the convergence progress of NAS with IFRS. Next, as an example, China's new accounting standards are examined, and its convergence level is measured using this new method.

Based on the previous calculation and analysis, we conclude that CAS has achieved its goal of substantial convergence with IFRS from the whole. The overall convergence level of CAS with IFRS calculated by matching coefficients is 0.7497, larger than 0.7, thus proving the substantial convergence of CAS with IFRS. When membership degree λ is assigned at 0.86, all cases are categorized into one. The result also reveals the ranks of a single standard's convergence level and indicates the emphasis of future efforts in bringing CAS further toward international convergence, even though the results reveal that the convergent level of CAS with IFRS is very high. However, in the long run, differences between CAS and IFRS will remain. The substantial convergence for most standards and the subtle differences for few also embodies characteristics of CAS in its development, especially considering the ongoing cooperation between IASB and FASB. Meanwhile, the revising processes of the IASB on IAS24, IFRS3, and others have been reducing and, in some cases, even eliminating the relative differences. Our example demonstrates that the new method of fuzzy clustering analysis cannot only assess the convergence progress of NAS with IFRS from the whole, but can cluster single standards according to their convergence level and can even indicate further convergence emphasis. This makes up for the flaws existing in the extant research, and makes it suitable for use in analyzing the convergence among different standards (horizontal) or the progress achieved within one standard (vertical). Measuring formal accounting standards convergence by fuzzy clustering analysis remains in an exploratory stage. Due to the fact that there are still some personal judgments in comparison items' choosing and value assignment, although achievements made by other researchers are also referenced in our study, there still may exist some bias of researchers. We hope our study will make a contribution in advancing the study of formal convergence and enable other researchers to make further progress in this field.