Team “IFRS Adoption: Compliance and Enforcement”Mid-Term Review

February 2009, Valencia

Markus Hitz (ER Tilburg),

Elena de las Heras (exESR Porto),

Liina Tamm (ESR Paris).

Enforcement and compliance

Compliance

(Accounting Quality)

Reporting entity

(managers)

determines

Enforcement system

Public

Private

Shareholders, creditors

Auditors

Enforcement Agency

influences

Regulation (EC) No 1606/2002, Par. 16: requires member states to ‘take appropriate measures to ensure compliance with international accounting standards’→ i.e. to install effective mechanisms for the enforcement of IFRS accounting standards.

Coordinating and supervisory role for the Committee of European Securities Regulators (CESR), subcommittee on enforcement: CESR “Standard No. 1 on Financial Information:

Enforcement of Standards on Financial Information in Europe” 2003

CESR, “Standard No 2 on Financial Information: Coordination of Enforcement Activities” 2004:

- European database on enforcement issues- European Enforcers Coordination Sessions (EECS)

CESR 2007 review: diversity of enforcement mechanisms

Regulatory Framework

Research on the role of enforcement

Recent research demonstrates that “law on the books”, i.e. the accounting standards per se, do not alone determine accounting quality and economic effects

“Reporting incentives perspective” One major factor in determination of accounting

quality is quality of enforcement: Hope (JAR 2003) Daske et al. (JAR 2008) (…)

Enforcement of IFRS matters!

Home institution: University of Cologne (Germany)

INTACCT institution: ER Tilburg (Netherlands)

Markus Hitz

Background

Markus Hitz

10/2008 – 01/2009 INTACCT ER, Tilburg University

Since 2/2005 Post doctoral researcher, University of Cologne

02/2005 PH.D. in business administration (accounting): “The decision usefulness of fair value accounting – a theoretical perspective”

01/1999 Diploma in Business Administration, University of Munich

Post-doctoral supervisor: Christoph Kuhner (University of Cologne)

INTACCT supervisor: Willem Bujink (Tilburg University)

Experience

Markus Hitz

Tilburg Research-oriented atmosphere Weekly research seminars Departmental structure

INTACCT Cyprus seminar Lancaster University Cooperation and communication

Output

Markus Hitz

Research:• “Enforcement of IFRS: Determinants and Consequences of Error

Announcements by the German Financial Reporting Enforcement Panel (FREP)” (with Jürgen Ernstberger)

• “Press release disclosure of ‘pro forma’ earnings metrics by large German corporations – empirical evidence and impact of regulatory recommendations”, under review (2nd round), Accounting in Europe

• “Relevance of academic research and researchers’ role in the IASB’sfinancial reporting standard setting”, forthcoming, Abacus (with Rolf Uwe Fülbier and Thorsten Sellhorn)

Other:• INTACCT database on EU country-specific institutions and regulations

Future plans

Markus Hitz

Research: Joint project with Ulf Brüggemann (ESR, Lancaster) and

Thorsten Sellhorn (WHU Koblenz) on “Mandatory Adoption of IFRS – Empirical Evidence and unintended consequences”

Other current project on pro forma earnings disclosures, management compensation

Career: Post doctoral degree (“Habilitation”) 2009 Job Market

Home institution: Autonomous University of Madrid (SPAIN)

INTACCT institution: Porto University (PORTUGAL)

Elena de las Heras Cristóbal

Background

Elena de las Heras

Nowadays University position at UAM

05/2007 07/2008 INTACCT ESR, Porto University

09/2005 06/2006 Visiting PhD student, Lancaster University

From 09/2004 PhD student, UAM

06/2005 Business Administration Degree

01/2003 12/2003 Internship as an Auditor in Deloitte

Doctoral supervisor: Leandro Cañibano (UAMINTACCT supervisor: José Moreira (Porto University)

Experience

Elena de las Heras

Porto: University and City Database and Econometric software Nice Office & Good Colleagues Very nice City

INTACCT Research trainings, seminars & congress around Europe Contacts around Europe (INTACCT members) Open minded and new experiences

Output

Elena de las Heras

Research:• “The Effect of the Spanish Audit Act (44/2002) on the audit

quality”• “Institutional factors of the Accounting-Policy Choice under

IFRS/IAS

Other:• INTACCT database on EU enforcement• ESR/ER group projects• Seminar and Conferences

Future plans

Elena de las Heras

- Future Research on IFRS

- Publishing the two researcher papers already written

- Cooperation with INTACCT members (research & mobility)

- University Career: Recognised University Qualification

Home institution: Turku School of Economics (Finland)

INTACCT institution: HEC Paris Management School (France)

Lina Tamm

Background

Liina Tamm

Since 06/2008 INTACCT ESR, HEC Paris Management School

Since 01/2008 PhD Studies, Turku School of Economics

2006 - 2007 MSc in Accounting, Erasmus University Rotterdam

2004 - 2007 Ernst & Young Baltic AS (Estonia)

PhD Thesis: “Auditing quality and accounting quality”

PhD supervisor: Hannu Schadewitz (Turku School of Economics)

INTACCT supervisors: Herve Stolowy, Thomas Jeanjean and Cedric Lesage (HEC Paris Management School)

Experience

Liina Tamm

HEC Paris Management School:

• PhD and Research Seminars

• Excellent learning environment

INTACCT:

• Seminars and workshops

• Knowledge and experience sharing

• Connections

Output

Liina Tamm

Research:

• Work in process : “Audit quality, auditor’s regulations environment in EU and the interaction with accounting quality”

Other Activities:

• ESR/ER group projects

Future Plans

Liina Tamm

Research:

• Finish current project• New project on accounting quality

After INTACCT (06/2009) continue co-operation with INTACCT members; seminars, courses on core competencies in research methodologies; finish PhD; job market