Professor David Cairns, A309

This course is intended for students on the MSc International Management (CEMS/IMEX route) who may be admitted if they have sufficient knowledge of accounting from previous studies.

This course examines the fast changing practices and institutions of financial reporting in the global economy. In accounting and auditing, international harmonization has been advocated as a way of enhancing the comparability and credibility of financial reporting and audit work, so as to stimulate the flow of cross-national investment, expand the scope for market-oriented development, and integrate local enterprises into global financial markets. This course critically examines the institutional conditions and consequences of these developments for financial statement users, business entities and wider local and global stakeholders. It analyses the roles of standard-setting institutions as well as national and international regulators, and reviews contemporary debates on harmonization and local differentiation.

The course deals with five interrelated issues:

1. Political, institutional and technical influences in changing national financial reporting frameworks.
2. The work of the International Accounting Standards Board (IASB), the European Union, national accounting bodies, and their political and economic environments.
3. Transnational corporations, and similarities and differences between financial reporting requirements for business entities operating locally and/or in the global economy.
4. The effects of national financial reporting requirements and International Financial Reporting Standards (IFRS) on business entities, their stakeholders, and local economic development.
5. The enforcement of financial reporting requirements through the actions of auditors, securities regulators, the World Bank and others.

The course explores issues from different theoretical perspectives through comparative empirical analysis. It examines global accounting from the perspectives of individual countries including developed and emerging economies, and it draws attention to specific technical challenges (for example, mergers and acquisitions, foreign currency transactions, derivatives and other financial instruments, stock options and intangible assets).

20 hours of lecture in the first term (MT). Classes: at least eight hours. It is intended to run a small number of lecturers with invited speakers who are centrally involved at a senior level in the setting, enforcement and convergence of international financial reporting regulations. Further details will be provided at the start of the session.

Students are required to write an essay of up to 5,000 words that deals with accounting for the global economy in the context of one of:

1. the financial reporting requirements of one country;
2. the accounting treatment for specific transactions and events; or
3. the work of the international body or agency.

This written work forms 100% of the assessment.

The course makes extensive use of journal articles as well as the pronouncements of the IASB and national standard setting bodies. Relevant books covering specific parts of the course are C Roberts, P Weetman & P Gordon, International Financial Accounting: a Comparative Approach; C Nobes & R H Parker, Comparative International Accounting; G Benston, M Bromwich, R Litan and A Wagenhofer, Worldwide Financial Reporting: The Development and Future of Accounting Standards and M-L Djelic & K Sahlin-Andersson, Transnational Governance: Institutional Dynamics of Regulation.

MSc International Management (CEMS/IMEX route) students are assessed solely on the written work and class participation.