The
financial crisis that hit the East Asian economies during 1997,
question many roles of accounting reporting and information. The
general consensus was that the crisis was triggered by
micro-economic problems and were compounded by lack of
transparency and accountability in the accounting information
produced. It was observed that inadequate disclosure was a
contributing factor to the crisis.
In
November 2000, the CAPA Executive Committee approved a project
to determine an indication of the extent of the inadequate
disclosure. A comparison was undertaken between selected
International Accounting Standards in existence at the time of
the financial crisis and the accounting policies employed in the
1997 reports of corporations and banks in five East Asian
countries affected by the crisis (Rahman 1998).
The
intention of this study is to examine the extent to which the
accounting policies of the entities examined in Rahman (1998)
have enhanced their level of disclosure thus providing a means
to mitigate future financial crises by the provision of reliable
micro-economic financial information.
This
study also examines the accounting disclosures of selected
entities in five East Asian countries identified in Rahman
(1998) to determine the extent to which their disclosure
policies now comply with International Accounting Standards (IAS).
The principal recommendation of the previous study was that
“concerted national and international efforts should be made
to develop and implement international accounting and reporting
standards”. Identification of the level of international
compliance provides a benchmark from which progress to date can
be evaluated and future policy implementation determined.
The
results of this study showed marked
improvements
in various factors such as disclosure levels, observance and
compliance with IAS and greater transparency. This important
study emphasizes the critical
role that the accountancy profession plays
in improving standards and compliance, as well as corporate
governance.
The
study concluded that there is scope
for a regional response to harmonization
in the Asian region particularly as the Standards Advisory
Council to the IASB provides for regional representatives to
consult with IASB in major policy decisions. The Confederation
of Asian and Pacific Accountants is uniquely placed to focus
attention on common Asian issues and formulate a response.
Final
Report
The final report is now available online. Please click to view.
