Does the Level of Enforcement Shape the Complexity in Accounting Standards?
This paper examines whether the level of enforcement shapes the complexity in accounting standards. First, in order to identify the level of complexity in accounting standards, we calculated a new measure that conceptualizes accounting complexity based on the theoretical dimensions of multiplicity a...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2023-02-01
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| Series: | International Journal of Financial Studies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-7072/11/1/34 |
| _version_ | 1797858434042822656 |
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| author | Ana Isabel Morais Inês Pinto |
| author_facet | Ana Isabel Morais Inês Pinto |
| author_sort | Ana Isabel Morais |
| collection | DOAJ |
| description | This paper examines whether the level of enforcement shapes the complexity in accounting standards. First, in order to identify the level of complexity in accounting standards, we calculated a new measure that conceptualizes accounting complexity based on the theoretical dimensions of multiplicity and diversity. To calculate this new measure, the content of each International Financial Reporting Standard and International Accounting Standard, in 2018, was analyzed. Second, we investigated whether the level of enforcement affects this score, using the number of enforcements published by the European Securities and Markets Authority (ESMA). Our results show that accounting standards with a higher number of enforcements by ESMA are also more complex, suggesting that enforcement is an important factor that explains the level of complexity of an accounting standard. This study is particularly relevant for regulators in the accounting, auditing, and enforcement fields, since it provides evidence of how enforcement contributes to increasing the level of complexity of accounting standards. This study contributes to the debate on the interdependence of enforcement and accounting regulation, showing that enforcement mechanisms can influence accounting standards. This study also calculates a new measure of complexity in accounting standards, rather than using a quantitative proxy. |
| first_indexed | 2024-04-09T21:13:19Z |
| format | Article |
| id | doaj.art-b56d03637d6c47968d7b001dd42a6d31 |
| institution | Directory Open Access Journal |
| issn | 2227-7072 |
| language | English |
| last_indexed | 2024-04-09T21:13:19Z |
| publishDate | 2023-02-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | International Journal of Financial Studies |
| spelling | doaj.art-b56d03637d6c47968d7b001dd42a6d312023-03-28T13:47:25ZengMDPI AGInternational Journal of Financial Studies2227-70722023-02-0111343410.3390/ijfs11010034Does the Level of Enforcement Shape the Complexity in Accounting Standards?Ana Isabel Morais0Inês Pinto1Advance/CSG, ISEG—Lisbon School of Economics & Management, Universidade de Lisboa, 1200-781 Lisboa, PortugalAdvance/CSG, ISEG—Lisbon School of Economics & Management, Universidade de Lisboa, 1200-781 Lisboa, PortugalThis paper examines whether the level of enforcement shapes the complexity in accounting standards. First, in order to identify the level of complexity in accounting standards, we calculated a new measure that conceptualizes accounting complexity based on the theoretical dimensions of multiplicity and diversity. To calculate this new measure, the content of each International Financial Reporting Standard and International Accounting Standard, in 2018, was analyzed. Second, we investigated whether the level of enforcement affects this score, using the number of enforcements published by the European Securities and Markets Authority (ESMA). Our results show that accounting standards with a higher number of enforcements by ESMA are also more complex, suggesting that enforcement is an important factor that explains the level of complexity of an accounting standard. This study is particularly relevant for regulators in the accounting, auditing, and enforcement fields, since it provides evidence of how enforcement contributes to increasing the level of complexity of accounting standards. This study contributes to the debate on the interdependence of enforcement and accounting regulation, showing that enforcement mechanisms can influence accounting standards. This study also calculates a new measure of complexity in accounting standards, rather than using a quantitative proxy.https://www.mdpi.com/2227-7072/11/1/34accounting complexityenforcementmultiplicitydiversityIFRS |
| spellingShingle | Ana Isabel Morais Inês Pinto Does the Level of Enforcement Shape the Complexity in Accounting Standards? International Journal of Financial Studies accounting complexity enforcement multiplicity diversity IFRS |
| title | Does the Level of Enforcement Shape the Complexity in Accounting Standards? |
| title_full | Does the Level of Enforcement Shape the Complexity in Accounting Standards? |
| title_fullStr | Does the Level of Enforcement Shape the Complexity in Accounting Standards? |
| title_full_unstemmed | Does the Level of Enforcement Shape the Complexity in Accounting Standards? |
| title_short | Does the Level of Enforcement Shape the Complexity in Accounting Standards? |
| title_sort | does the level of enforcement shape the complexity in accounting standards |
| topic | accounting complexity enforcement multiplicity diversity IFRS |
| url | https://www.mdpi.com/2227-7072/11/1/34 |
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