Hegel (1770–1831) posited a theory of dialectic in which contradiction is regarded as the root of all change (Hegel, 1969). Finally, the paper reflects on the current state of the global accounting standards harmonization agenda and offers some conjectures about future developments. Thereafter, the current thesis and antithesis regarding global accounting standards harmonization is outlined, and a synthesis already achieved, and the several others likely to emerge are explained. 2 It then explains various relevant forms of isomorphism, the concept of decoupling, and salient features of Foucault's concept of knowledge and power. To capture the broad process of international accounting standards harmonization, this paper introduces key elements of Hegelian dialecticism ( thesis, antithesis and synthesis) in order to foster understanding of the macro-dynamics associated with global accounting harmonization agendas. Consequently, an important question that arises in debates about international accounting harmonization is whether accounting ought to be conceived as truly universal or as subject to variation because of environmental factors. Militating against this view (the antithesis) is environmental determinism theory: that accounting should be a product of the unique environment in which it operates (Gernon and Wallace, 1995). This holds that all users of financial statements have the same needs in all countries and that economic transactions can be measured universally in accounting terms using the same procedures (Mora, 1995). A central pillar of such arguments has been free culture theory. Many arguments about the merits of global harmonization of accounting standards have been advanced. Although the move to harmonize accounting standards throughout the world is politically intricate, theoretically complex, and operationally uncertain, the drive to do so has strong impetus (Chand, 2005, p. Nonetheless, it is only within the last two decades that the international harmonization of accounting standards has gained widespread and effective acceptance (Cooper et al., 2003, p. Consequently, in modern society, the global harmonization of accounting standards might be regarded as uncontroversial, unremarkable, and inevitable. The world has witnessed the standardization of time, weights and measures, means of communication, and methods of production 1 and has seen the growth of numerous organizations (e.g., International Organization for Standardization) “through which regulation by international technical standards has replaced regulation by national policy” (Menzies, 2005, p. Such standardization has been described aptly as part of “the general constellation of developments … known as modernity” (Menzies, 2005, p. The push for global adoption of IFRS is part of a general wave of standardization that has taken place in broader, non-accounting contexts over the past 150 years. Using these three lenses, this paper seeks to assist those associated with international accounting standards harmonization (whether they be issuers, appliers, or users of resultant financial statements) by providing better explanations of how international harmonization has evolved, how it has affected institutional and social structures, and how it might progress in the future. Third, is the lens provided by Foucault's concept of knowledge and power. ![]() Second, is the lens through which the institutionalization of accounting is viewed as being effected by coercive, normative and mimetic isomorphism, and by a process of decoupling. This views the world as one of constant change arising from thesis, antithesis and synthesis. First, and most important, is the lens provided by Hegelian dialectic. 763).Īn innovative analytical approach is deployed, in which accounting harmonization is conceived as interpretable through three complementing lenses. 763) contention that “knowledge of how forms of financial accounting emerge from, sustain and modify wider institutional and social structures is modest.” The paper is motivated also by Hopwood's criticism that previous attempts to enhance such knowledge have overindulged in “… simplistic theories of differentiation … deep rooted notions of cultural understanding and … psychological appreciations of institutional differences” (Hopwood, 2000, p. This paper aims to improve understanding of the processes involved in achieving widespread institutionalization of harmonized international accounting standards, particularly International Financial Reporting Standards (IFRS).
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