Changes in IFRS accounting policies in the European Union: a count data approach

Firms have changed their accounting policies, either due to the EU's regulatory impositions or due to their own will, after the mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union (EU), for all listed companies in the EU Member-States except banks and insurance companies. We examined the changes in accounting policies between 2006 and 2011. The process of harmonisation of accounting policies within the EU is formal, as the changes introduced by such policies are essentially considered immaterial. The heterogeneity of the accounting policies might have been maintained. Furthermore, such changes have been influenced to a significant degree by the presence of the Big 4 and by the dimension of the entities. The results also suggest that the judgment used to assess the materiality of these changes is not homogeneous. Knowledge of the variables that explain IFRS adoption would allow us to determine whether the information disclosed by different companies can be compared, and it would provide regulatory bodies and European institutions with some guidance on how to improve and clarify the regulations.