Washington Consensus, Financial Reporting and Emerging Economies
RESEARCH IN ACCOUNTING IN EMERGING ECONOMIES, Supplement 2, ACCOUNTING AND ACCOUNTABILITY IN EMERGING AND TRANSITION ECONOMIES, Trevor Hopper, Zahirul Hogue, eds., pp. 93-116, Elsevier, 2009
Posted: 24 Mar 2009
Date Written: March, 23 2009
Abstract
The purpose of this paper is to examine the financial reporting issues facing emerging economies in the wake of financial liberalization reforms brought about by the World Bank's Washington Consensus policies. We argue that these reforms were not implemented in an appropriate manner leading to a disparity between the intended convergent objectives of financial liberalization and underlying divergent corporate governance and financial reporting practices. We examine the suitability of International Accounting Standards and US General Accepted Accounting Principles as a way forward for emerging economies. In addition, we extend a framework that maps financial reporting and corporate governance systems to economic development in order to highlight why convergence is not an appropriate mechanism for progress.
Keywords: Washington Consenus, Financial Reporting, US GAAP
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