(Completed June 2003)
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.
The final report is now available online. Please click to view.