Unravelling the ‘Black Box’ of the Accounting Profession: Evidence from the IFRS for SMEs

Abstract

The current project of the IASB to issue accounting standards for small and medium firms (so-called “IFRS for SMEs”) intends to further boost the accounting harmonization process. At the same time, the standards have been discussed and criticized from several parts and the European Commission has decided to not adopt them for the moment. Di Pietra et al. (2008) and Quagli and Paoloni (2012) show that the preparation process of the IFRS for SMEs does not fully involve some important constituencies that would be strongly affected by the new standards, in primis chartered accountants. We conducted an extensive survey of 1,269 Italian Chartered Accountants (CAs) and ten interviews with presidents of the local CAs’ Associations to detect any possible “decoupling” between the structures and activities (DiMaggio & Powell, 1983). First, we assess CAs’ attitude towards the new standards and, in particular, we document the role played by the perception of the financial and economic benefits of the new standards and the understanding of the technical and the reasons that led to the preparation of the IFRS for SMEs. Second, we study the heterogeneity among CAs and we find that the level of knowledge of these standards and the perceived relevance of tax rules positively influence the perception of the new standards, whereas the length of the CA’s professional experience has a negative effect.