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TRANSCRIPT
Analysis of the Spanish economists about their accounting standards: an opinion from the experience
Marcos Antón Renart Universidad de Murcia
Esther Ortiz Martínez Universidad de Murcia
Salvador Marín Hernández Universidad de Murcia
Área Temática: A - Normalização Contabilística e Relato Financeiro
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Abstract
The implementation, more than eight years ago, of the new Spanish General Accounting
Plans (the standard one and the other for Small and Medium Enterprises (SMEs)), both
adapted to International Financial Reporting Standards (IFRS), lead us to know the
opinion of professionals related to accounting and financial information on the
incidence that applying these standards has in their daily work. In order to make this,
the Economists were asked one questionnaire in four different years. This allow us to
know about the accounting experience in Spain and also to see how the passage of time
has altered their perceptions about this accounting transformation process and also how
it affects their level of understanding. We conclude that the complexity encountered by
economist-accountants when facing regulatory reform varies significantly over time, as
well as their initial understanding of this regulation.
1. INTRODUCTION
For more than a decade we have witnessed the implementation of International
Accounting / Financial Reporting Standards (IAS / IFRS) and their detailed analysis,
through numerous studies a priori and posteriori, of the impact of implementing such
legislation. In summary, and in general, the analysis of the numerous studies on the
subject has led to the search for conclusions on: a) the clearing of any uncertainty
generated by the application of new regulations regarding their effects on companies, at
an individual level, as well as in capital markets; b) the analysis of the extent of
differences when applying domestic and international regulations c) the positive effect
analysis of the implementation of such international regulations.
From the studies that were analysed, it can be concluded that the adoption of IFRS
generally assumes more advantages for companies (better quality of accounting
information), even though the expert opinion on regulatory changes can vary with the
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understanding and the passage of time, with regard to the diversity of opinions
according to different samples at different times.
All this regulatory change in Europe and Spain led us to consider, following various
authors, such as Carmona and Trombetta (2008); Ewert and Wagenhofer (2012);
Holthaussen and Watts (2001); Trombetta, Wagenhofer, and Wysocki (2012) that
academic research can help regulators and standard setters to assess ex ante and ex post
standardisation and regulatory effects of both financial information and disclosure. But
no form of investigation is sufficient by itself. On the contrary, the understanding of
accounting in its social and institutional context will come from the dialogue between
all of these perspectives, Larrinaga (1999). And so, the central and basic concept of this
work is to be through the transmittance and analysis of the voice of professionals in this
field and incorporating into this analysis and debate the effect of the passage of time and
the influence of the degree of understanding.
In order to do this, we have divided this work, as well as this introduction, into a second
section where we review the literature on this theme at an international level, followed
by all the empirical study and the main results analysis, to end up with the most relevant
conclusions.
2. LITERATURE REVIEW
We agree with García Benau (1997, p.263,276) that one of the most appealing ideas that
can be contemplated in the academic world is to think of the changes that theory and
research have over practice, being complex and dynamic in nature and changing the
analysis of the interrelation between theory and accounting practice.
However, a criticism that can be made to one part of this research that looks at the
changes in regulation and its effects, is that traditionally the focus has been mainly on
the costs and benefits that occur just in the next period of the implementation of the
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regulation, but however, in the following periods, the literature is scarce on the "time
effect", although there is some evidence that the benefits of IFRS implementation
increase over time, ICAEW (2015); Brown (2011). Also, the literature regarding this
subject has been extensive, but its influence on the implementation of standards has
been diminished by not developing a descriptive accounting theory and its subsequent
implementation, Holthaussen and Watts (2001).
In general, at an international level, it seems that the advantages of the European
accounting harmonisation process, seek to achieve a greater financial information
homogeneity and comparability thereof outweigh the drawbacks. It seems however, that
these benefits are distributed unevenly between firms and countries, Aubert and
Grudnitski (2011); Pope and McLeay (2011); Nobes (2013); Estima and Mota (2015),
as it does not seem clear as to what extent the benefits and costs resulting from IFRS
adoption are directly attributable to the financial regulation change, Giner (2015). Also,
professional associations such as ICAEW (2014, 2015) conclude that there is
insufficient evidence on the benefits of mandatory IFRS adoption.
Therefore, among the advantages to which this harmonisation process and IFRS
adoption leads, the following can be highlighted:
a) The differences between domestic regulations and international regulations
are reduced, EFAA (2010); Bae, Tan, and Welker (2008); Chen, Qingliang, Yihong,
and Zhijun (2010); Ball (2006).
b) The harmonisation process of accounting standards improves the
comparability of companies at an international level, European Commission (2015);
Brown, Preiato, and Tarca (2014); Wang (2014); Vergauwe and Gaeremynck (2013);
André, Dionysia and Tsalavoutas (2012); Yip and Young (2012); Latridis (2010);
Carmona and Trombetta (2008).
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c) Considering exogenous shocks, such as the financial crisis, accelerate the
process towards better and more comparable disclosure practices, Vergauwe and
Gaeremynck (2013);
d) Harmonisation provides an improvement in capital market efficiency,
European Commission (2015); André et al. (2012);
e) Being able to have a set of 'high quality' IFRS standards, Ball (2006);
f) IFRS is a real challenge where all the parties involved, (entities, auditors,
regulators) take this very seriously and where users in Europe will benefit from its
adoption, Hoogendoorn (2006);
g) The quality of information needs to be significantly improved and the benefits
resulting from its adoption are greater than the costs, Estima and Mota (2015);
European Commission (2015); Soderstrom and Sun (2007), even though it may not be
fulfilled by firms that do not have incentives to adopt IFRS, Christensen, Lee, Walker,
M. and Zeng (2015).
The main disadvantages are:
a) IFRS effectiveness can be hampered by the existing differences between
countries in the institutional framework within which financial information is produced,
Brown et al. (2014); Yip and Young (2012); Chen et al. (2010); Ball (2006);
b) Mandatory adoption of IFRS is not enough to achieve comprehensive
comparability in the European Union (EU), Wang (2014); Yip and Young (2012); Cole,
Branson, and Breesch (2011); Cole et al. (2011); Hoogendoorn (2006);
c) The transition from national accounting standards to IFRS was complex and
costly, Estima y Mota (2015); André et al. (2012);
d) In some aspects, IFRS does not improve the information when compared to
the domestic standard, Jarva and Lantto (2012).
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e) The concern about cost persists over time. The adoption of DIRECTIVE
2013/34 demonstrates the concern regarding accounting costs and the effect on
companies, especially the smaller ones.
According to a European Commission report (2015), 86% of the samples handled were
of the opinion that the financial information applying IFRS was more transparent; 68%
that IFRS introduction contributed to a better understanding of financial statements;
63% that IFRS introduction contributed to easier access to capital at an international
level; And 71% felt that the introduction of IFRS improved investor protection.
Regarding the benefits/costs of applying IFRS, 60% believe that the benefits of its
application exceed the costs associated to them and states that costs are easier to
quantify than benefits; that the current costs are small when compared to the initial
ones; and that the cost/benefit ratio depends on the company characteristics.
Regarding the duration of the new regulatory approval process, there is a need to have
sufficient time to implement the standards. The fact that they are alien to the accounting
system itself leads to the belief that the process may have been carried out too rapidly
and whether it may have been rushed, Markelevich, Shaw, and Weihs (2011). Such
adoption may constitute difficulties from the cultural idiosyncrasy point of view of each
accounting system, Mukoro and Ojeka (2011). According to the European Commission
(2015), 70%-75% of cases believe that the quality of financial statements prepared
under IFRS is good/very good and that IFRS use has increased their comparability but
also their complexity (Most national public authorities believe that IFRSs are more
difficult to understand).
In Spain, the White Paper on Accounting Reform, ICAC (2002), shows that 53.50% of
the respondents have a high-good understanding of IFRS (7.95% no understanding).
Cóndor et al. (2006) concludes that 71.95% of the companies surveyed claim to know
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the IAS (4.88% in detail). In Navarro, Sánchez, and Lorenzo (2007), 30% of company
financial directors and 92% of auditors, recognise knowing the international standards.
And Gonzalo Angulo (2014), indicates that the accounting profession in Spain can
undertake, with a guarantee of success, these changes and meet the quality standards in
financial information.
If we focus on the uneven impact of the application of new regulations, by area and
accounting concepts, another conclusion that can be drawn from the countless
international studies on the issue, is the effect that the implementation of a new
regulation will have on domestic accounting (EFAA, 2010, 2014). In Spain, the General
Accounting Plan (GAP) launched in 2007 and adapted to the IFRS, represented a major
shift compared to the previous GAP of 1990. As per the areas that have introduced other
major quantitative changes when compared with the previous regulation, and the
concepts that have shown greater operational complications for the adaptation to the
new regulations can be seen table 1 Fitò, Gómez, and Moya (2010).
Table 1. Relevance of changes in the main accounting magnitudes Accounting Magnitudes Relevance of the differences between PGC 90 and PGC 2007
Assets
Fixed assets Significative
Intangible assets Non significative
Property, plants and equipments Non significative
Long term investments in group companies and associates Non significative
Deferred tax assets Significative
Current assets Significative
Long term investments Non significative
Total assets Significative
Liabilities and equito
Net equito Significative
Reserves Significative
Non current liabilities Very significative
Long term provisions Non significative
Long term loans with group companies and associates Non significative
Other non current liabilities Very Significative
Deferred tax liabilities Very Significative
Current liabilities Non significative
Gains and losses
Net revenues Non Significative
Net income Significative
Source Own elaborated from Fitò et al. (2010).
For Herreros and Larburu (2009), the Spanish GAP 2007 incorporates new accounting
policies and measurements, and significantly modifies others, making it necessary to
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perform much more complex analyses, involving specialists from other disciplines or
independent experts. Information users have also made an important effort to update
their understanding as well as their analysis tools. Regarding the degree of
understanding, Milanés and Texeira (2006) analyse whether entrepreneurs who do not
have training to interpret what the official accounts show, are the ones that place less
value on such information, concluding that it is necessary to train the entrepreneur in
order to obtain a return on accounting activity. In Marín, Antón, and Palacios (2008),
Spanish economists evaluated as important / very important the knowledge acquired in
accounting and finance for the development of their professional career and subsequent
performance. In addition, 91.6% of the respondents went on more training courses after
completing their university studies, being useful to 90.42% to find or perform a job.
Nevertheless, the intrinsic difficulties of these rules for SMEs were observed, as well as
the professionals' poor training, Molina (2013). As it is known, the option of adopting
these rules for SMEs was dropped with the arrival of the EU Accounting Directive
(2013) by not adequately serving the objective of simplifying and reducing
administrative burdens, leaving the option of using them open to the member countries
for unlisted companies, European Commission (2013).
In the Spanish case, this simplification came through RD 1515/2007, which was already
adapted to international regulations and its publication coincided with RD 1514/2007.
Subsequently, progress on the transposition in Spain of the Accounting Directive on the
simplification of small company accounting obligations had been made. Two have been
the most significant steps taken: the approval of the Law on Audit of Accounts (Law
22/2015) and a recent RD (Royal Decree) that came to light in December 2016. This
RD will be retroactive and will be applicable from 1st January 2016 and will conclude
the transposition process, Ortiz (2016).
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It seems clear, the important role that the regulator has played and continues to play.
The obligation for EU-listed groups to submit their consolidated information under
IFRS standards as of 2005, led the regulator to design a strategy to adapt the national
accounting model to a new environment, Zorio (2004), so that the desired
harmonisation in European countries could be achieved through their reference to
external rules, since in previous decades it has been very difficult to achieve this
through internal consensus, Gonzalo Angulo (2004).
As for the effect of the passage of time after an accounting standard reform, according
to Navarro et al. (2007), it is not surprising that as the understanding of the new
regulation progresses, users notice certain problems or inconveniences that this new
regulation may bring, so that the generic theoretical acceptance of the new regulations
could decrease as it begins to be applied and translated into new requirements. ICAEW
(2015) reveals one of the main features of any great transition: that professionals learn
as time passes and that teachers, users and investors show signs that it takes time to
learn IFRS, being able to consider two transitions: a) The change from pre-IFRS to
IFRS is gradual and b) professionals gradually learn how to apply IFRS and how to use
IFRS information. It also points out how researchers seem to focus on very short-term
changes, seeing the immediate effects of adopting IFRSs but in practice it does not seem
to have been proven how it works for long periods. Brown (2011) states that since
IFRSs are not static, early results on the implementation of the standard may not be
sustained over time, and that in the face of a complex change in the environment, people
do not adjust their behaviour overnight. In this regard, Estima and Mota (2015) point
out that the consequences of adopting IFRS will probably begin to be identified after
many years of applying these standards.
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Considering what was analysed in the introduction and this literature revision we can
deliver our analysis on the debate topics of this work, which are not other than: general
analysis and opinion on the whole process of IFRS adoption in Spain by accounting
professionals represented by the Accounting Economists (EC-CGE), the relationship
between this adaptation with the accounting research, as well as the effect, above all, of
the passage of time and understanding.
3. EMPIRICAL ANALYSIS
3.1 Methodology
To obtain the results and conclusions of this work, a questionnaire was used in four
different time periods: 2008, 2009, 2012, and 20151. The core element of the
questionnaire is the same as in the previous questionnaires (as can be seen in Table 2),
consisting of three different content categories which include: questions with closed
answer options, answers with dichotomous options, closed possibilities of choice with a
final section where respondents could include another free-form option, but that has
hardly been used, and some questions with an open format. Some questions are asked
where the response involves a rating scale, a Likert scale has been chosen, with answers
ranging from 1 to 5, from lowest to highest value. In all questionnaires, the answers
have been treated in an aggregated and anonymous way, with the last two surveys
having been carried out online, so that the members of Accounting Economists (EC-
CGE) could access it, one time per associate.
Table 2. Parts and questions of the questionnaire
QUESTIONNAIRE 2008 2009 2012 2015
Part 1: Knowledge, information, training and first application of the accounting standards
Have you had enough information and training to cope with the accounting changes? x - - -
What kind of actions have done in this sense your company? x - - -
Degree of undestanding you claim to have regarding the new regulation x x X x
1 This questionnaire has been undertaken in all cases by the members of the specialized body of the
Spanish Consejo General de Economistas which brings together accounting economists.
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You think that the new regulations have introduced… x x X x
To do the adjustments necessaries for the first application… x - - -
Part 2: Main areas in which the new regulations have introduced greater complexity
Areas in which the new regulations introduce the greatest quantitative x x X x
Concepts that have presented major operational complications to adapt to the new regulations x x X x
Concepts that introduce the greatest quantitative changes in net equity x x X x
Concepts that introduce the greatest quantitative changes in the assets x x X x
Concepts that introduce the greatest quantitative changes in the liabilities x x X x
Concepts that introduce the greatest quantitative changes in the income x x X x
Part 3: Perception of the professionals about ICAC, new PGC, IFRS or current situation questions
Whether the ICAC should report on the changes that the new PGC includes in sectorial adaptations and resolutions x x X x
Which sectorial adaptations and resolutions should be urgently published or done x x X x
Whether the ICAC should further reduce the accounting and financial regulations for SMEs x x X x
Whether the ICAC should require that the financial statements were signed by professionals together with the managers x x X x
Whether foundations should disclose financial information with more transparency x x X x
If you would have preferred to apply IFRS directly x x X x
If you would have preferred to use fair value for property, plants and equipments or value asset updates x x X x
If is necessary to carry out value asset updates in Spain each 4/5 years - - - x
Whether there should be only an accounting regulator for every kind of entity, or there should be different ones distinguishing between
SMEs and listed companies - - X x
Whether you deem that have sufficient time to meet the deadlines set by the ICAC befote changes in the regulations x x X x
Whether convenience and opportunity of the creation of Expert Economists in Accounting and Financial Information and the Register
of Experts Accountants x x X x
How the new accounting regulations have affected the different productive sectors of the Spanish economy - - - x
How the new accounting regulations have affected the financial sector - - - x
Source: Own Elaborated
The statistical analysis was performed using SPSS 23.0 for Windows. The differences
considered statistically significant are those where p <.05. For the qualitative variables,
the number of cases shown in each category have been obtained along with the
corresponding percentage; and for the quantitative variables, the minimum, maximum
values, mean and standard deviation.
By having responses to the same questions for 2008 (just at the beginning of when new
accounting regulations came into force), 2009, 2012, and most recently 2015, eight
years after the initial entry, we considered taking into account the course of time in
assessing the answers of the professionals. When the participants are randomly assigned
to each of the samples, we can guarantee statistically that they are independent samples,
Molinero (2001).
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Therefore, the comparison between groups for the qualitative variables was performed
using the Chi-square test and the Z-test for equal proportion of the columns. For the
means comparison between two groups, the t-Student or ANOVA test was used
according to the number of groups, and the normality and homogeneity fulfilment
assumption was verified with the Kolmogorov-Smirnov test and the test of Levene,
respectively, Pagano and Gauvreau (2001), Pértega and Pita (2001).
Moreover, we used a multiple regression model to decide which variables had a
significant effect on the degree of understanding. The methodology followed in the
statistical analysis of the calculated model was as follows: (1) One-off assessment of the
model parameters; (2) Relevance of the variables and constant of the model; (3)
Contrast of the regression (ANOVA) to study the overall validity of the model and
verify that (together) the explanatory variables provide information in the interpretation
of the response. Evaluation of how well the model fits, through the determination of the
coefficient and (4) the hypotheses of the model verification through waste analysis,
Hair, Anderson, Tatham, and Black (1999).
3.2 Sample and Hypothesis
The global population to which the survey has been directed to, was that of all 2,000
economists who are members of EC-CGE, the specialised body of the General Council
of Economists (CGE). The responses received in each of the four years allowed us to
make estimates with a confidence level of at least 90% and with a maximum sampling
error of ±4.7%. The response rate obtained for all the years is above 15% of the
population, with this being a high percentage for the work that use the survey as a basic
tool of its empirical methodology.
In addition, having introduced a variable that is the degree of understanding that
professionals have about the regulations, which they value, and having answered in four
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successive temporal time periods in a sufficiently long time frame and allows us to raise
for its contrast the following two hypotheses, according to the antecedents previously
detailed:
H1: The passage of time significantly influences in the professionals' perception of the
new accounting standards in Spain.
H2: The professionals’ degree of understanding on the new accounting standards in
Spain increases with the passage of time, and in turn significantly influences their
perception of it.
4. ANALYSIS RESULTS
4.1 Analysis of the overall results and the passage of time effect
In this first section, we are going to focus on the overall results obtained in the
professionals' answers, as well as the first hypothetical comparison: the effect of the
passage of time. To do this, we will initially follow the same order as in the
questionnaires.
On the degree of understanding that professionals believe they have regarding the new
regulations, we can highlight that in the first year of its application they believed they
understood the new regulation well. This perception changed after their first experience,
although as the time has passed, the degree of understanding that the professionals had,
soared, so that after the first application of this accounting reform, they believed that
they had strengthened their understanding and that they had a better understanding of
the new PCG, reaching a similar level to the optimistic data obtained from the first
survey (ANOVA: F (3.1185) = 50.92 , P <0.001) (data included in Table 3).
Table 3. Degree of understanding regarding the new regulation
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Source: Own Elaborated
Table 4. The new regulation has introduced…
2008 2009 2013 2015
N (%)
A- Greater costs with few competitive and informative
improvements
106a
(26,8)
139b
(46,8)
71b
(42,5)
126b
(38,5)
B- Little additional costs with few competitive and
informative improvements
158a
(40) 79b (26,6)
48a,b
(28,7)
107a,b
(32,7)
C- Little additional costs with greater competitive and informative improvements
79a (20) 34b (11,4) 28a,b
(16,8) 59a,b (18)
D- Greater costs with greater competitive and informative
improvements
52a
(13,2) 45a (15,2) 20a (12) 35a (10,7)
a-b: different words show differences statistically significative with p <
.05 in test of comparison of column proportions Source: Own Elaborated
With regards to the costs and competitivity and the informative improvements that this
new regulation introduced, the professionals' perceptions are different (Table 4).
However, the results obtained do show in the majority of respondents (A, B and C) that
in the first year of implementation it was clear for companies that little additional cost
would be attracted, with few competitive and informative advantages (40% of the
answers obtained), whereas the perception changes after the experience, becoming for
subsequent years at a greater cost, whereas the competitive and informative
improvement continues to be valued as limited.
With respect to the areas in which the new regulations have introduced greater
complexity for these professionals, it is in Equity where they believe that the
complexity is greater (the highest affirmative percentages are in this area [Table 5]).
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Although the passage of time predetermines their responses in this sense, statistically
significant differences are obtained between the results of the survey until the second
year after the entry into force of the new regulations and the subsequent results, in the
sense that once the first two years of the entry into force of the new GAP have passed,
the perception of complexity increases.
Table 5. Areas in which the new regulations have introduced greater complexity
2009 2013 2015
Equity
No 126a (42,4) 49b (29,5) 105b (32,2)
Yes 171a (57,6) 117b (70,5) 221b (67,8)
Liabilities
No 275a (92,6) 117b (70,5) 249b (76,1)
Yes 22a (7,4) 49b (29,5) 78b (23,9)
Assets
No 193a (65) 104a (62,7) 220a (67,5)
Yes 104a (35) 62a (37,3) 106a (32,5)
a-b: different words show differences statistically significative with p <
.05 in test of comparison of column proportions Source: Own Elaborated
Thereupon we refer to the concepts that have presented major operational complications
to adapt to the new regulations (Table 6). A priori the results obtained are very different.
There are concepts in which the opinion about its complexity is maintained over the
years regardless of whether it is the first year of the new regulations' application, or
more time has passed by, as is the case with the financial investments in hybrids (In
Table 6, it is clear that there are no significant differences between the different years
and the average of responses, with responses higher than 4 and hence quite complex).
While in the other extreme we can find concepts such as sectoral adaptations, which do
not follow any pattern, and present significant differences in the responses between the
years analysed. In the first commented case: hybrids, it is true that they involve a very
important complexity and also their use is not widespread, which is not the case for
sectoral adaptations, although very specific, they are used mostly in those sectors to
which they refer.
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Table 6. Concepts that have presented major operacional complications to adapt to
the new regulations (1. None, 5. A lot)
2008 2009 2013 2015 ANOVA
Average (SD) Average (SD) Average (SD) Average (SD) F(3,1178) p-value
AMORTISED COST 4.34a (0.74) 3.83b (0.69) 3.36c (1.31) 3.28c (1.26) 80.093 < 0.001
OPERATING LEASES 2.33a.b (1.11) 2.50a.b (0.5) 2.25a (1.24) 2.52b (1.09) 4.335 0.005
SECTORIAL ADAPTATIONS 3.50a (1.12) 3.20b (0.89) 2.63c (1.09) 2.95d (1.17) 29.502 < 0.001
FINANCIAL ASSETS 4.00a.b (0.82) 4.16a (0.69) 3.87b (1.1) 3.93b.c (1.02) 5.029 0.002
ANNUAL STATEMENTS 2.33a (1.11) 3.10b (0.7) 2.37a (1.07) 2.89b (1.13) 41.7 < 0.001
FINANCIAL INVESTMENTS IN HYBRIDS
4.17a (0.69) 4.34a (0.75) 4.12a (0.91) 4.16a (1.18) 3.139 0.025
TIE (EFFECTIVE INTEREST
RATE) 3.50a (1.12) 3.64a (0.96) 3.61a (1.05) 3.88b (1.07) 8.045 < 0.001
NEW TERMINOLOGY 2.84a.b (0.69) 2.68a (1.1) 2.63a (1.12) 3.03b (1.19) 8.484 < 0.001
GROUPS 8 AND 9 3.17a (0.9) 3.64b (0.96) 3.60b (1.18) 3.64b (1.43) 15.023 < 0.001
GRANTS 2.66 (1.11) 2.58 (1.11) 2.67 (1.06) 2.78 (1.05) 1.756 0.154
PROVISIONS 2.33a (1.11) 2.86b (0.8) 2.70b (1.06) 2.85b (1.07) 21.069 < 0.001
RELATED PARTIES 3.66a.b (0.94) 3.83a (0.69) 3.54b (1.04) 3.68a.b (1.17) 3.481 0.015
FIRST APPLICATION OF THIS
REGULATION 3.50a (1.12) 3.51a (1.12) 3.13b (1.11) 3.15b (1.22) 9.487 < 0.001
DERIVATIES 4.34a (0.74) 4.32a.b (0.75) 4.08b.c (0.89) 3.89c (1.34) 15.683 < 0.001
FORMAT OF ANNUAL
STATEMENTS 2.66a (1.11) 3.64b (0.96) 2.76a.c (1.1) 3.00c (1.17) 49.584 < 0.001
a-c: different words show differences statistically significative with p <
.05 (Tukey) Source: Own Elaborated
The rest of the concepts, according to the professionals’ opinion, we could have a
complexity determined by the passage of time. In some cases, the key factor in
assessing their complexity is the application of the new legislation in the first year, as
happens in Groups 8 and 9 and with provisions (the first year of the survey is
statistically significantly different from the other three years, according to the results of
Table 6). Increasing in both cases, the complexity perception after its first application,
(groups 8 and 9 went from an average of 3.17 to averages higher than 3.6, and the
provisions from an average of 2.33 to averages higher than 2.7). In this line of results
there are also other concepts in which not only is the first year of application of the new
regulation the one that marks the differences with respect to the later ones, but it is the
first two years of applying the new regulation that statistically show significant results
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to the later years, in terms of an increase in complexity, and also its reduction. This
happens with the first application of this regulation, which seems to reach its maximum
complexity in its second year of implementation and then which descends in the
subsequent years, since the issues that arose in a first application are then solved with
the practice and the passage of time (it shifts from a complexity average of 3.51 in the
second year to averages of 3.13 and 3.15 in later years). Or the amortised cost example,
in which the years after the second year of the implementation of new regulations
implies a perception of reduced complexity. In other cases, the opposite is true, as in the
TIE (effective interest rate) case. It is not the first years of application of the new
regulations that are key in the perception of its complexity, but rather, as time passes
and they are studied in more detail, or these concepts are simply applied to more cases,
the complexity is greater (the first three waves of surveys do not show statistically
significant differences for the TIE (effective interest rate) in Table 6, whereas the most
recent and farthest in the first application of this regulation is clearly different, with a
clearly higher mean of complexity, which goes from being in the range of 3.5-3.64 to
3.88).
As this regulatory change resulted from the IAS/IFRS application in Europe,
professionals were asked if they would have preferred to apply these international
standards directly. The prevailing opinion throughout was that they preferred this
accounting reform (Graph 1). In this case, behavioural patterns of statistically
significant responses have not been found, depending on when the survey was
conducted (χ2 (3) = 5.79, p = 0.122).
Graph 1. If professionals would have preferred to apply IAS/IFRS directly
18
Source: Own Elaborated
The following question is whether the professionals deem that they have sufficient time
to meet the deadlines set by the ICAC before changes in the regulations (Graph 2). The
answers of the professionals are influenced by the passage of time, because when the
new regulations were on trial, most then believed that they have had time, a perception
that was not the same in previous years. This change of opinion is verified statistically
by seeing the differences according to the time at which the survey was conducted
(Graph 2): since there are significant differences between the previous year's
questionnaire, when more time has passed since the new regulations, and the first six
years of its implementation (χ2 (3) = 22.54, p <0.001).
Graph 2. Whether the professionals deem that they have sufficient time to meet the
deadlines set by the ICAC before changes in the regulations
Source: Own Elaborated
We then try to verify if there is a relationship between the answers in the first year after
the new regulations were applied (2008) and eight years later (2015), for the survey
19
questions whose answer was a dichotomous variable. So, in order that we can join these
results to those of the tests carried out taking into account the four different moments in
time in which the survey was performed. In this sense, we find that when the
professionals already had a better understanding of what the accounting reform had
implied, they considered that the timeframes foreseen by the ICAC before new
regulations or clarifications are sufficient. This is the only independence hypothesis that
we can reject among the answers in these two moments of time (χ2 (1) = 4.02, p
<0.045).
In other words, in the answer to this question, there is a decisive role in the moment in
which opinion is obtained, whether in the first year of the new regulations being in
force, or after a sufficiently long adaptation period. Furthermore, this result obtained on
the passage of time effect in the first application of these accounting regulations, leads
the professionals to have a greater understanding of them and, perhaps they can relate to
the regulation more. Noting the output in the contingency table, we can highlight that
67.1% of the professionals who thought that the deadlines foreseen by the ICAC were
not sufficient, now think that they are, so that with the passage of time it is considered
that the deadlines set by the ICAC will be sufficient.
4.2 Statistical analysis of the relationships between the professionals' answers
regarding new regulations and their degree of understanding
In this second section of the analysis we are going to focus on the second stated
hypothesis comparison. To this effect, we are going to study the relationships between
the answers of the professionals to the different questionnaires, and the degree of
understanding they claim to have regarding the new regulation, although the effect of
the passage of time in our study always prevails.
20
The first statistically significant result that we obtained (included in Table 7), tells us
that the professionals who seem to have a little bit more knowledge, consider that it is
not necessary to carry out value asset updates (the knowledge degree average is 4.27 for
not considering necessary the fair value, and somewhat lower, 4.09 for those who do
consider it necessary).
If we increase the degree of significance from 5% to 10%, we also obtain a relationship
between the degree of knowledge that the professionals claim to have, and whether or
not they have preferred to apply IAS/IFRS directly. Those professionals who claim to
have a deeper understanding of the new regulations prefer the way that this has been
used: the adaptation of the regulations themselves and not the direct IAS/IFRS
application (the average level of understanding is 4.2 for not applying directly and
somewhat lower, 4.04 for those who do advocate direct application).
Table 7: Degree of understanding regarding the new regulation and whether or
not to apply IAS/IFRS directly (2015) and whether or not is necessary to carry out
value asset updates (2015)
Min Max Average (SD) T(d.f.) p-value
IAS/IFRS t(315) = 1,84 0,067
No 3 5 4,2 (0,7)
Yes 1 5 4,04 (0,8)
Fair Value t(313) = 1,84 0,019
No 3 5 4,27 (0,6)
Yes 1 5 4,09 (0,8)
Source: Own Elaborated
Table 8 shows the results of the multiple regression models performed for the years
2013 and 2015 to determine which variables influence the level of understanding.
For 2013, (as we have seen previously), the new regulation, according to the
professionals, introduces the greatest quantitative changes in equity, but this perception
is linked to those respondents who have a lower level of understanding. This same
21
relationship is obtained for the quantitative changes that the new regulation implies on
the asset, associated to those professionals who have a lower level of understanding. In
the regression for 2015 this significant relationship disappears, with which once again it
is verified that the passage of time, and therefore the repeated application of this
regulation, implies a less complex interaction, while in lockstep with a greater
understanding.
Out of the concepts that has generated major complications in 2013 as a consequence of
the introduction of the new accounting standards, it is accepted that they are related with
the new accounting management of financial instruments, such as: amortised cost
calculation, financial assets, and the effective interest rate, which generate the biggest
operational complications, and are associated with a lower understanding level of the
respondents. This issue is beyond the operational scope of many SMEs and therefore
also of the professionals, and hence that initial difficulty is associated with the lower
level of understanding. In addition, these are also the only concepts that keep the
significant relationship in the 2015 regression, associating it once again with a lower
level of understanding (the evidence of the relationship is again negative). Eight years
after the first application of this accounting standard, its complexity or understanding
does not depend on the day-to-day operations in this case, but on the type of operations
carried out by the company, which does not use financial instruments, and hence
professionals do not know their accounting treatment.
The same reasoning can be used for the significance obtained in 2013 with regards to
the operational complications introduced by the related parties, which again are
associated with a lower level of understanding. When you master a subject because you
handle it on a day-to-day basis the difficulty it seems to carry is less, and in this case,
22
being familiar with transactions with related parties implies that the company has
reached a certain dimension, which is not the majority in our productive framework.
The same type of relationship is produced in 2013 between the respondents' opinion on
whether it is necessary for the ICAC to analyse the new regulations' effects by
publishing the corresponding adaptations and resolutions, linked to a lesser
understanding of it. After two year, in the regression of 2015, this variable no longer
appears as significant, proving how the passage of time has gradually led to a better
understanding of the new regulation and therefore making this need will no longer be
manifested as such.
And we finally found the respondents' opinion on whether it would have been better to
apply the IFRS directly without going into a reformation of our system. In this case, in
both 2013 and 2015, an affirmative response to the direct adoption of IFRS is associated
with a lower degree of professional understanding. These results are consistent with
what we have already highlighted: that professionals prefer the solution that has been
chosen in Spain, which has been the reform of our system.
23
Table 8: Multiple regression models to determine which variables influence the level of understanding
2013 (n = 116) 2015 (n = 261)
Beta (SE) p Beta (SE) p
Area_greatest_quantitative_changes_NetEquity_2013 -0,301 (0,158) 0,009 -0,102 (0,119) 0,193
Area_greatest_quantitative_changes_Liabilities_2013 -0,063 (0,143) 0,508 0,017 (0,114) 0,803
Area_greatest_quantitative_changes_Assets_2013 -0,216 (0,152) 0,048 -0,009 (0,113) 0,901
Concepts_major_complications_AMORTISEDCOST_2013 -0,145 (0,059) 0,038 -0,032 (0,041) 0,028
Concepts_major_complications_FINANCIALASSETS_2013 -0,095 (0,082) 0,002 -0,059 (0,053) 0,009
Concepts_major_complications_HYBRIDS_2013 -0,01 (0,117) 0,948 0,041 (0,052) 0,625
Concepts_major_complications_TIE_2013 -0,148 (0,079) 0,027 -0,013 (0,055) 0,018
Concepts_major_complications_GROUPS8AND9_2013 -0,176 (0,063) 0,093 -0,048 (0,038) 0,495
Concepts_major_complications_RELATEDPARTIES_2013 -0,39 (0,069) < 0,001 0,072 (0,041) 0,269
Concepts_major_complications_DERIV_2013 -0,08 (0,116) 0,573 0,014 (0,046) 0,865
IFRS_directly_without_PGC_2013 -0,038 (0,124) 0,008 -0,109 (0,101) 0,039
Sufficient_time_2013 0,139 (0,139) 0,180 0,191 (0,096) 0,121
R2 ajusted (%) 29,9 27,9
Model F(15,100) = 2,85*** F(15,245) = 1,93**
Normality† p=0,238 p=0,321
Independence‡ 2,03 1,99
Homocedasticity+ p=0,868 p=0,745
Source: Own Elaborated
24
5. CONCLUSIONS
We have contrasted the starting hypothesis of this paper: the passage of time
significantly influences the perception of professionals before the new accounting
regulations in Spain derived from the IFRS application; As well, the professionals'
degree of understanding on this new regulation increases with the passage of time,
significantly influencing their appreciation of it. All this is endorsed by previous work,
like those of ICAEW (2015); Estima and Mota (2015) and Brown (2011), or Milanés
and Texeira (2006) and Marín et al. (2008).
We must also stress that:
- Professionals go from valuing the new regulations with little competitive and
informative benefits for companies and lower costs, to higher costs and the same few
competitive and informative advantages. This change of opinion is due to the greater
understanding of the regulation once they have already begun to implement it, and
therefore the time has passed since its first entry into force.
- With the new regulations, there are areas that professionals value as more complex,
but whose assessment is conditioned by their lack of understanding. Surely because the
operations carried out by the companies related to these professionals, do not imply an
exhaustive understanding of these issues, since they are simpler, because it is the net
equity area, groups 8 and 9, amortised cost or calculation of the TIE (effective interest
rate).
-Those who use the accounting standard in their daily practice, the accounting
economists, prefer the non-direct IFRS application for all Spanish business typology,
but instead the other format that has been chosen. That is to say, the direct application
of IFRS by Regulations for listed groups, and the reform of our legal system and
25
adapting it to IFRS for the rest of the Spanish companies. This option has also been
even more valued by those who have a greater understanding of this new regulation.
-The feeling of having sufficient time to assume a new regulation is totally a relative
one, because it depends on the moment when you ask: if it is at the beginning, the
perception is that there was not enough time, and if it is after, having made the new
regulations their own, it is considered that there has been enough time, because it is seen
from a different perspective.
Finally, we emphasise that we have had a large and significant sample, which has
allowed us to do this work, without having the limitations of studies that are based on
survey results, besides having been able to have a time series, wide enough to study the
effect of the passage of time from the first implementation of a regulatory reform. This
leads us to consider future studies that add up to the results of another survey in a
broader time horizon, so that it is possible to verify how the professionals' responses
affect this perspective after a longer period of time, since regulatory reform has been put
into practice, and even introduce new variables that provide information on the
application of the new regulations by business sectors of application.
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