Academic journal article Business Education & Accreditation

Ifrs Readiness in Latin American Business Curricula

Academic journal article Business Education & Accreditation

Ifrs Readiness in Latin American Business Curricula

Article excerpt


Multinational companies doing business in Latin America, and elsewhere in the world, must comply with individual countries' financial reporting and financial market rules and local legislation when disclosing financial information. This research assesses international financial reporting standards (IFRS) readiness in the finance, accounting, and taxation curricula in Latin American universities.

JEL: M4; 12

KEYWORDS: international financial reporting standards, business curricula, Latin America

(ProQuest: ... denotes formulae omitted.)


The issue to be addressed in this paper is whether or not Latin America's business curricula are ready to provide students the necessary international financial reporting standards (EFRS) knowledge to be successful either as financial report or tax return preparers or advisors or as users of financial information for making judgments and decisions. These judgments and decisions should consider financial market rules for companies to seek investment and financing opportunities and rights and duties under individual country's laws applying to such markets. According to March 2010 statistics of IFRS requirements for 172 country jurisdictions, 120 of them either require or allow IFRS for local companies listed in their stock exchanges (Deloitte Touche Tohmatsu, 2010). Munter and Reckers (2009) report the results of a survey of United States' participants, in which 22% intended to significantly incorporate IFRS into the curriculum during 2008-2009 and 33% planned to do so in 2009-2010. As more countries accept and implement plans for convergence to or adoption of IFRS, it is increasingly important for students of accounting, finance, and taxation to become more knowledgeable about IFRS.

The objective of this paper is to assess IFRS readiness in Latin American business curricula, compared to that of the United States and Canada. The data was obtained from course descriptions found on websites of a sample of universities listed on the Webometrics Ranking of World Universities. The EFRS readiness measure was the estimate of the proportion of accounting courses that include the discussion of IFRS as part of their description, for universities located in the Latin America region. Statistically significant proportion estimates were compared with subsamples from the United States and Canada region to analyze if there were significant differences in IFRS readiness in Latin America curricula when compared to those of the United States and Canada region.

Curricula must enable students to be knowledgeable with possible explanations for differences in accounting practices accepted in countries other than their own. These explanations include cultural, economic, legal, and economic factors, among others. IFRS readiness has important implications over the before mentioned disciplines for the successful application and usefulness of a set of high quality, global accounting standards. Finance professionals must understand how IFRS may impact the content, quality, and relevance of accounting information. This information is important in making judgments and decisions concerning the cost of raising capital in worldwide markets and the decision of whether to invest in international securities and/or acquire foreign firms or expand into new markets. The use of IFRS also affects the results of investment portfolio evaluation and performance indicators and metrics.

IFRS also has implications for tax practice. It affects tax planning and tax compliance, including documentation requirements. This is due to tax issues that may arise because of optimal foreign investment opportunities and financing choices under the implementation of IFRS principles.

While there is increased awareness of the challenges faced by the accounting profession's evolution towards global standards, this in and of itself does not guarantee that curricula reflect this trend. …

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