The implementation of international financial reporting standards at the level of individual reports in Hungary: an empirical research

Abstract

It is typical that every country has its own specific accounting system, but the processes that took place in the second half of the 20th century fundamentally changed economic thinking. Hungary's accounting harmonisation commitment has become more important since its accession to the European Union in 2004. In 2013, at the initiative of the Ministry of National Economy, preparatory work was launched to explore the conditions under which the application of International Financial Reporting Standards could be introduced at the level of individual reports. In 2015 new accounting regulations have been introduced in accordance with the International Financial Reporting Standards. A phased implementation was decided in order to allow sufficient time for enterprises to prepare, but ultimately it was necessary to extend the deadlines. Consequently, we conclude that the entities concerned were not always sufficiently prepared to apply International Financial Reporting Standards to their individual reports. Analyses of practical experience can play an important role in developing methods to facilitate the application of International Financial Reporting Standards.  In our empirical research, we interviewed subjects who had first-hand experience of the 2015 change in accounting in Hungary, the process of International Financial Reporting Standards adoption for individual reporting purposes. This change provided the opportunity to facilitate accounting work and was another step towards strengthening international accounting harmonisation processes. Like all innovations, this one has its difficulties, so understanding them is essential, both for scientific progress and to facilitate practical work. The aim of our research is to explore, through informal interviews, the difficulties and problems experienced by those involved in the implementation of International Financial Reporting Standards for financial reporting purposes, mainly accounting staff. The exploration of practical experience will provide us with an opportunity to gain a more detailed understanding of the process of international accounting harmonisation and may help to create measures that not only facilitate but also facilitate the unification of accounting at a global level, the importance of which is now undisputed.