Internationalizing accounting standards the conflict of objectives and constraints

Recent events suggest that global convergence towards international financial reporting standards (IFRSs) among countries are gaining momentum. However, a detailed investigation of the reality reveals difficulties. The experience of Taiwan reflects these issues. This paper examines those factors, which influenced the degree of success of convergence. In-depth interviews were conducted with 21 interviewees consisting of professional accountants, industrial executives and accounting regulators. They identified the national legal system as the main factor preventing harmonization. This factor was also viewed as a mechanism to protect Taiwan's interests. Furthermore, changing from a rules-based approach to a principles-based approach is not just an issue of translating English-worded standards into Chinese but of overcoming conceptual and practical problems. The experience of Taiwan is probably not unique amongst the financially sophisticated, smaller countries in the Far East that have particular issues, which are often overlooked by the broader accounting community. The study provides valuable lessons for policy-makers and corporate management in their pursuit of accounting harmonization.