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An Accounting Educator’s Summary on IFRS Adoption in Taiwan

An Accounting Educator’s Summary on IFRS Adoption in Taiwan. Ling-Tai Lynette Chou Director, Academic Exchange, TAA Professor, National Chengchi University 2009 TAA Annual Meeting, Tainan, Taiwan. Outline (1). Ⅰ) Adoption Status Report. 1. Major Driving Forces.

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An Accounting Educator’s Summary on IFRS Adoption in Taiwan

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  1. An Accounting Educator’s Summary on IFRS Adoption in Taiwan Ling-Tai Lynette Chou Director, Academic Exchange, TAA Professor, National Chengchi University 2009 TAA Annual Meeting, Tainan, Taiwan

  2. Outline (1) Ⅰ) Adoption Status Report 1. Major Driving Forces 2. Recommendations of IOSCO in 2000 3, Time Table 4, Standards Setting

  3. Outline (2) II) Impact of IFRS Adoption on Accounting Educators • 1. Adaption of Teaching • 2. Teaching Materials • 3. What Else Can Accounting Educators Do?

  4. I) Adoption Status Report

  5. 1. Major driving forces Improve global competitiveness Make TW accounting standards consistentwith the world Develop an information disclosure mechanism consistent with the world

  6. Recommendations of IOSCO • Member countries allow cross-border companies to compile financial reports in compliance with IFRS when they apply for public issuance and listing of their stocks. • To increase comparability of financial statements of international companies and to lower the cost of raising capital from worldwide markets, member countries should make their local standards consistent with international accounting standards.

  7. A Special Task Force Formed Special Task Force on IFRS Adoption Members including representatives of FSC, MOE, MOF, accounting academe, TSE,TGTC, public accounting profession, ARDF and industrial organizations.

  8. Task Assignment Planning Group Promulgate a blueprint Group 3: Legislative support Group 1: Preliminarytasks Group 4: Popularization Translation of IAS Regulation change Active propagation Group 2: Implementing IFRS Gather reported problems • Publicizing exposition • Offering courses • Consultation channels • Financial reporting • Corporate governance • Franchised industry • Financial/tax difference Solve problems Seamless transition

  9. 2. Time Table (1)

  10. 2. Time Table (2) • Adoption of IFRS in two phases： • First-phase companies：public companies and financial firms under supervision of Financial Supervisory Commission (Credit card issuers, credit corporations, insurance brokers and agents are not included.) • Second-phase companies：private companies, credit corporations and credit card issuers

  11. 2. Time Table (3)

  12. 3. Standards Setting (Financial Accounting Standards) Starting 1999, forty ROC Statements of Accounting Standards were revised and updated to converge to IAS. In 2009, the IFRS Translation Review Committee issued requests for comments for IAS #18(Revenue), #40(Investment property), #21(Foreign Exchange Rates), #8(Operating Segments) and #17(Leases).

  13. 3. Standards Setting (Statements of Auditing Standards)

  14. 3. Standards Setting (Statements of Valuation Standards)

  15. II) Impact of IFRS Adoption on Accounting Educators

  16. 1. Adaptation of Teaching: Education Timeframe Sep.09 Sep.10 Sept.’11 Sept.’12 Sept.’13 Jan.’11 Jan.’12 Jan.13 First-phase companies will compulsorily adopt IFRS 2009 new students must learn IFRS. Teaching materials for sophomores (e.g. intermediate accounting) also need to be adjusted for them. Disclosure of the plan of implementing IFRS and the influence of IFRS ROC GAAP IFRS FreshmanSophomoreJuniorSenior Graduation

  17. 1. Adaptation of Teaching: Teaching Methods • Rule-Based -> Principle-Based • Teaching Method: • Training how to make judgments and choices • Training how to find answers; not just memorizing answers

  18. Adaptation of Teaching: OSU Courses

  19. 1. Adaptation of Teaching:Exam/Grading • Assigning questions relying on reasoning (not just memorizing) • Encouraging critical thinking and reward answers based on reasoning (not just memorizing) • Identifying learning levels: knowledge, comprehension, application, analysis, synthesis, and evaluation (Bloom 1956)

  20. 2. Teaching Materials 20 Knowledge to support judgment-making may come from: economics, finance, industry, research methods, information technology, behavioral sciences, etc. Students also need trainings in ethics to hold up their judgments.

  21. 2. Teaching materials • Text books • Teaching cases • Acer: Core management principles

  22. Acer: Core Management Principles • Background • Background of Taiwan • Global PC industry • History of Acer • Company philosophy • Business model • Management of foreign exchanges • Influence of fair value standards

  23. 3. What Else Can Accounting Educators Do? • We seem to know more about foreign situations than about our own? -Institutions/people matter? -Incentives: Research to know? Research to cure? Research to publish? • Knowledge consumers vs. knowledge producers -Knowledge-based judgments -Literature review -Meta-analysis -Editorial policy of journals • Scattered research vs. systematic research

  24. Appreciation • Thanks to the following individuals for sharing their thoughts with us: -Rong-Ruey Duh, Professor of NTU • Mei-Yen Jiang, Partner of DT, Taiwan • Hsien-Yin Lu, Manager of FSC

  25. Thank you !

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