Contents -- Index of figures XIX -- Index of tables XXI -- Index of abbreviations XXV -- Index of symbols XXXI -- 1 Foundation 1 -- 1.1 Introduction 1 -- 1.1.1 The international financial accounting language of IFRS 1 -- 1.1.2 Research questions and contribution 5 -- 1.1.3 Outline of the study 8 -- 1.2 Scientific research strategy and conceptualization 10 -- 1.2.1 Science and philosophy of science 10 -- 1.2.2 Business economics research strategies 12 -- 1.2.3 The empirical research process 13 -- 1.2.4 Scientific programs in financial accounting research 16 -- 1.2.4.1 Basic scientific approaches 16 -- 1.2.4.2 Critical rationalism 19 -- 1.2.4.3 Constructivism 20 -- 1.2.5 Positioning of the study 22 -- 1.3 International financial accounting harmonization in the EU 22 -- 1.3.1 Accounting diversity versus accounting harmonization 23 -- 1.3.2 The international financial accounting harmonization process 26 -- 1.3.3 The EU financial accounting harmonization process 29 -- 1.3.3.1 EU accounting Directives 29 -- 1.3.3.2 The IAS Regulation 32 -- 1.3.3.2.1 Legal requirements 32 -- 1.3.3.2.2 EU institutional prerequisites 34 -- 1.3.3.2.3 The EU endorsement process 35 -- 1.3.3.2.4 EU enforcement harmonization 37 -- 1.3.4 Possible differences in IFRS practice 39 -- 1.3.4.1 Reasons 39 -- 1.3.4.2 Opportunities 40 -- 1.3.4.2.1 Different versions 41 -- 1.3.4.2.2 Different translations 42 -- 1.3.4.2.3 Gaps 43 -- 1.3.4.2.4 Overt options 44 -- 1.3.4.2.5 Covert options and vague criteria 46 -- 1.3.4.2.6 Measurement estimations 47 -- 1.3.4.2.7 Transitional or first-time adoption issues 48 -- 1.3.4.2.8 Imperfect enforcement 50 -- 1.3.5 EU regional focus 51 -- 1.3.5.1 EU country selection 51 -- 1.3.5.2 Motivation for country selection 53 -- 1.3.5.3 Country profiles 54 -- 1.3.5.3.1 France 54 -- 1.3.5.3.2 Germany 58 -- 1.3.5.3.3 United Kingdom 62 -- 1.4 Field of research 66.

1.4.1 International financial accounting research 66 -- 1.4.2 International comparative financial accounting research 68 -- 1.4.2.1 Definition of the field of research 68 -- 1.4.2.2 ICFAR framework 70 -- 1.4.2.3 Refinement of the ICFAR framework 75 -- 1.5 Prior research 77 -- 1.5.1 Culture free studies 77 -- 1.5.1.1 Studies on IFRS determinants and consequences 77 -- 1.5.1.2 IFRS practice studies 79 -- 1.5.2 Culturally grounded studies 82 -- 1.5.2.1 Culture studies applying the Hofstede-Gray framework 82 -- 1.5.2.2 Culture studies on IFRS practice 83 -- 1.5.3 Prior research contributions, limitations and research gap 85 -- 1.6 Summary 87 -- 2 Theory and hypotheses development 90 -- 2.1 Overview 90 -- 2.2 Theoretical perspectives 91 -- 2.2.1 System theory 91 -- 2.2.2 Contingency theory 93 -- 2.2.2.1 The basic model of contingency theory 93 -- 2.2.2.2 Contingency theoretical variants 96 -- 2.2.2.3 Critical appraisal of contingency theory 99 -- 2.2.2.3.1 Conceptual criticism 99 -- 2.2.2.3.2 Methodological criticism 100 -- 2.2.3 The societal effects approach 101 -- 2.2.4 Culture theory 104 -- 2.2.4.1 Concepts of culture 104 -- 2.2.4.1.1 Definition of culture 104 -- 2.2.4.1.2 Conceptual alternatives 105 -- 2.2.4.1.3 GLOBE study 108 -- 2.2.4.1.4 Critical appraisal of the GLOBE study 109 -- 2.2.4.2 Culture theory according to Hofstede 111 -- 2.2.4.3 Cultural dimensions according to Hofstede 114 -- 2.2.4.3.1 Power distance 115 -- 2.2.4.3.2 Uncertainty avoidance 116 -- 2.2.4.3.3 Individualism versus collectivism 118 -- 2.2.4.3.4 Masculinity versus femininity 120 -- 2.2.4.4 Critical appraisal of Hofstede's culture theory 121 -- 2.2.4.5 Accounting values as part of the societal value system 123 -- 2.2.4.6 Accounting values according to Gray 125 -- 2.2.4.6.1 Professionalism vs. Statutory Control 125 -- 2.2.4.6.2 Uniformity vs. Flexibility 125.

2.2.4.6.3 Conservatism vs. Optimism 126 -- 2.2.4.6.4 Secrecy vs. Transparency 127 -- 2.2.4.7 The Hofstede-Gray framework 128 -- 2.2.4.7.1 Refinement of the Hofstede-Gray framework 129 -- 2.2.4.7.2 Application of the Hofstede-Gray framework 130 -- 2.2.5 Institutional economics 133 -- 2.2.5.1 Agency theoretical basic assumptions 134 -- 2.2.5.2 Principal agent conflicts 135 -- 2.2.5.3 Principal agent information strategies 137 -- 2.2.6 Positive Accounting Theory 138 -- 2.2.6.1 PAT basic assumptions 139 -- 2.2.6.2 The concept of political costs 140 -- 2.2.6.3 PAT conceptual criticism 141 -- 2.3 Conceptual framework 142 -- 2.3.1 Development of the conceptual framework 142 -- 2.3.2 Refinement of the conceptual framework 144 -- 2.3.2.1 External context factors 144 -- 2.3.2.1.1 Financing system 145 -- 2.3.2.1.2 Legal system 147 -- 2.3.2.1.3 Tax system 148 -- 2.3.2.1.4 Enforcement system 150 -- 2.3.2.1.5 National GAAP 152 -- 2.3.2.2 Internal context factors 156 -- 2.3.2.2.1 Size 156 -- 2.3.2.2.2 Industry 157 -- 2.3.2.2.3 Auditor 159 -- 2.3.2.2.4 Internationality 160 -- 2.3.2.2.5 Profitability 162 -- 2.3.2.2.6 Leverage 163 -- 2.3.2.3 Integration of external and internal context factors 165 -- 2.3.3 Development of the base hypotheses 166 -- 2.3.4 Development of the sub-hypotheses 167 -- 2.3.4.1 Development of the conservatism sub-hypotheses 168 -- 2.3.4.1.1 Indirect conservatism indicators 169 -- 2.3.4.1.1.1 Market to book value 170 -- 2.3.4.1.1.2 Negative accruals value 171 -- 2.3.4.1.2 Direct conservatism indicators 173 -- 2.3.4.1.2.1 Capitalization of development costs 173 -- 2.3.4.1.2.2 Purchase price allocation 174 -- 2.3.4.1.2.3 Tangible assets depreciation 175 -- 2.3.4.1.2.4 Fair value measurement 178 -- 2.3.4.2 Development of the secrecy sub-hypotheses 179 -- 2.3.4.2.1 Indirect secrecy indicators 180 -- 2.3.4.2.2 Direct secrecy indicators 182.

2.3.4.2.2.1 Segment reporting 182 -- 2.3.4.2.2.2 Income tax reporting 184 -- 2.4 Summary 185 -- 3 Research design 188 -- 3.1 Overview 188 -- 3.2 Empirical research strategy 188 -- 3.3 Data collection 190 -- 3.3.1 Methods of data collection 190 -- 3.3.2 Content analytical foundation 192 -- 3.3.3 Disclosure index 193 -- 3.3.3.1 Selection of disclosure index items 194 -- 3.3.3.2 Weighting of disclosure index items 195 -- 3.3.3.3 Development of the disclosure indices 197 -- 3.3.4 Content analysis quality factors 200 -- 3.3.4.1 Reliability 201 -- 3.3.4.2 Validity 203 -- 3.4 Data evaluation 205 -- 3.4.1 Statistical foundation 205 -- 3.4.2 Descriptive statistics and univariate analysis 207 -- 3.4.3 Bivariate correlation analysis 209 -- 3.4.4 Multiple regression analysis 210 -- 3.4.4.1 The multiple regression model 210 -- 3.4.4.2 Multiple regression assumptions 211 -- 3.4.4.3 Multiple regression analysis proceeding 213 -- 3.5 Summary 214 -- 4 Empirical results 215 -- 4.1 Overview 215 -- 4.2 Company sample 215 -- 4.2.1 Sample selection 215 -- 4.2.2 Size 217 -- 4.2.3 Industry 220 -- 4.2.4 Auditor 221 -- 4.2.5 Internationality 222 -- 4.2.6 Profitability 223 -- 4.2.7 Leverage 225 -- 4.3 Empirical analysis 226 -- 4.3.1 Conservatism 226 -- 4.3.1.1 Market to book value 227 -- 4.3.1.1.1 Descriptive analysis 227 -- 4.3.1.1.2 Correlation analysis 229 -- 4.3.1.1.3 Regression analysis 231 -- 4.3.1.1.4 Implications 234 -- 4.3.1.2 Negative accruals value 235 -- 4.3.1.2.1 Descriptive analysis 236 -- 4.3.1.2.2 Correlation analysis 238 -- 4.3.1.2.3 Regression analysis 238 -- 4.3.1.2.4 Implications 241 -- 4.3.1.3 Capitalization of development costs 242 -- 4.3.1.3.1 Descriptive analysis 242 -- 4.3.1.3.2 Correlation analysis 245 -- 4.3.1.3.3 Regression analysis 245 -- 4.3.1.3.4 Implications 248 -- 4.3.1.4 Purchase price allocation 249 -- 4.3.1.4.1 Descriptive analysis 250.

4.3.1.4.2 Correlation analysis 252 -- 4.3.1.4.3 Regression analysis 252 -- 4.3.1.4.4 Implications 254 -- 4.3.1.5 Tangible assets depreciation 255 -- 4.3.1.5.1 Depreciation of buildings 256 -- 4.3.1.5.1.1 Descriptive analysis 256 -- 4.3.1.5.1.2 Correlation analysis 260 -- 4.3.1.5.1.3 Regression analysis 261 -- 4.3.1.5.1.4 Implications 265 -- 4.3.1.5.2 Depreciation of plant and machinery 267 -- 4.3.1.5.2.1 Descriptive analysis 267 -- 4.3.1.5.2.2 Correlation analysis 271 -- 4.3.1.5.2.3 Regression analysis 271 -- 4.3.1.5.2.4 Implications 275 -- 4.3.1.6 Fair value measurement 277 -- 4.3.1.7 Conservatism robustness test 279 -- 4.3.2 Secrecy 282 -- 4.3.2.1 Total notes disclosure 282 -- 4.3.2.1.1 Descriptive analysis 282 -- 4.3.2.1.2 Correlation analysis 284 -- 4.3.2.1.3 Regression analysis 285 -- 4.3.2.1.4 Implications 288 -- 4.3.2.2 Segment reporting 289 -- 4.3.2.2.1 Descriptive analysis 290 -- 4.3.2.2.2 Correlation analysis 293 -- 4.3.2.2.3 Regression analysis 294 -- 4.3.2.2.4 Implications 297 -- 4.3.2.3 Income tax reporting 299 -- 4.3.2.3.1 Descriptive analysis 299 -- 4.3.2.3.2 Correlation analysis 303 -- 4.3.2.3.3 Regression analysis 304 -- 4.3.2.3.4 Implications 308 -- 4.3.2.4 Secrecy robustness test 310 -- 4.4 Summary and discussion 312 -- 5 Conclusion 324 -- 5.1 Main findings 324 -- 5.2 Implications and contribution 328 -- 5.3 Limitations 331 -- 5.4 Perspectives 334 -- Appendix 337 -- Bibliography 343.