INTERNATIONAL ACCOUNTING REGULATIONS RESPONSE FOR THE GLOBAL FINANCIAL CRISIS

The paper draws on the economics of standards to inform current debates on international accounting standards. It illustrates these benefits and disadvantages with cases from accounting regulation. Equally significant is the need for a more informed understanding of the changes that have occurred in the influence structures in the world of accounting politics both national and international, of the changing role that accounting plays in the informational environment of organizations and with how accounting changes in relation to shifts in the underlying nature of the socio-economic system in which business operates. This study examined the impact of the adoption of international accounting standards on the economic performance of businesses listed on the Budapest Stock Exchange in Hungary. The samples consist of 65 international adopting and 260 local (Hungarian) accounting rules user firms. Financial data are from published accounting statements in Budapest Exchange Trade and Hungarian Business Information database. The adoption decision model tested if the demand from internal performance evaluations is a factor in businesses decisions to adopt international accounting standards under the global financial crisis situations. The result of this research suggested that larger businesses, those with higher leverage, with more substantial foreign sales are more likely to adopt international standards. Controlling for the effects of macro-economic conditions by including the market return in Hungary it was pointed that the coefficients on market returns had been insignificant in the various regressions. This suggests that the increase in the sensitivity of turnover to accounting performance post-adoption is primarily driven by heightened turnover sensitivity to accounting losses.