EIRP Proceedings, Vol 2 (2007)

Abstract

The accounting is becoming more harmonised. In June 2002 was it decided that all listed
companies, insurance companies and banks have to implement a common accounting system throughout the
European Union (EU). This will ease the comparison of the financial statements between companies in different
countries and branches. Consequently will the investor’s decision-making be facilitated. Even though, all
concerned parties have known about the implementation for some time, some problems concerning the
timeframe will appear. Another problem is that the actual date for the implantation is 1st January 2004 as a
one-year comparison statement is needed. As IASB still is reviewing and changing existing standards will the
users have problems knowing what standards to apply. There are also some standards that still not have been
put into force. Aim of study: To elucidate what accounting system, IAS or Swedish GAAP, that gives the most
true and fair view of the companies financial statements. The accounting systems view on the concept true and
fair will also be investigated. Delimitations: The study is only focusing on the Swedish market and is not
concentrating on any specific branches. Methodology: Interviews with four IAS-experts at the four major
auditing firms in Sweden have been carried out. These interviews have been a support and complementary
information for the literature, journals and Internet sites that have been covered in the literature review. The
empirical findings have then been analysed in relation to the literature review. Results and conclusion: We have
reached a conclusion that the interpretation of true and fair view is very individual. Hence, is it rather difficult
to say which system that gives the most true and fair view. As Sweden accepts IAS as a new accounting system it
could be argued that it is not poorer that Swedish GAAP. It will also become easier to compare Swedish
companies with other companies within the EU. This is seen to contribute that more investors will look at the
financial market in EU. In a couple of years would we probably have reached another result as IAS then already
would have been implemented. Further studies: A study could also be carried out after the implementation has
taken place. At this time interviews could be made with both auditors’ and companies’ in order to reach an
understanding of what system that has the most true and fair.