Germany's Adoption of International Accounting Standards Research Paper

Germany's Adoption of International Accounting Standards
An analysis of the harmonization process of accounting standards in Europe in general, and in more detail in Germany.
# 129027 | 2,677 words | 32 sources | APA | 2010 | GB
Published on Aug 26, 2010 in Accounting (Theory) , Business (Accounting) , Business (International)

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This paper provides an analysis of the strong movement towards global harmonization of accounting standards despite various national general accepted accounting practices (GAAP), particularly German, being substantially different. The paper explains that great successes have already been achieved, such as IAS adoption in EU and Australia; however, there is still considerable work to be done in order to not only impose international standards but also achieve better compliance and interpretation. With regard to Germany, the paper notes that reasonable attempts have been made to adopt IAS; however, there are many transition difficulties due to great discrepancies between IAS and HGB that must be addressed in order to achieve successful transition. This paper contains an illustrative figure.

Issues Behind EU's Decision To Adopt IAS
Transition Process in Germany
German National Accounting System
Main Areas of Transition Difficulty
Evaluation of Transition Success

From the Paper:

"Figure 1 serves to illustrate the amount of examinations, carried out from 2006 till 209 as well as error rate. The primary errors relate to the insufficient management report and the application of IAS/IFRS. It can be observed that the error rates are higher for the companies that are not attached to any index which implies that for larger companies the transition process is easier to accomplish. However, the index-linked companies (include DAX, MDAX, SDAX and TecDAX)
are showing tendency of increasing errors. In 2009, for the first time, there was one DAX company with a high error rate. According to DPR-FREP, the underlying reasons for this increasing rate were the financial and economic crises, which led to errors in reports on risks and forecasts (DPR-FREP, 2010, p6). It should be also noted that the amount of average individual errors per company has been reducing steadily from five individual errors in 2007 to an average three individual errors in 2009."

Sample of Sources Used:

  • Alexander, D., Nobes, C. (2004) Financial accounting - an international introduction (2nd edn.). Harlow, Prentice Hall.
  • Callao S., Ferrer, C., Jarne, J. I. and Lainez, J. A. (2009) 'The impact of IFRS on the European Union: Is it related to the accounting tradition of the countries?'. Journal of Applied Accounting Research, vol. 10-1, 33-55.
  • Clavel, J.G., Martinez, I., Ortiz, E. (2003) 'Ranking of handicaps in international financial analysing'. European Business Review, vol. 15-3, 170-180.
  • Christensen, H. B., Lee, E., Walker, M. (2007) Incentives or standards: What determines accounting quality changed around IFRS adoption? Electronically accessed 3rd Jan 2010.
  • Czinkota, M.R., Ronkainen, I. A. and Moftt, M. H. (2009) Fundamentals of international business (2n edn.). Bronxvillea and New York, Wessex.

Cite this Research Paper:

APA Format

Germany's Adoption of International Accounting Standards (2010, August 26) Retrieved August 08, 2022, from

MLA Format

"Germany's Adoption of International Accounting Standards" 26 August 2010. Web. 08 August. 2022. <>