The Impact of Accounting Principles on Profits: The US versus Japan

Weetman and Gray (1991) sought to add quantitative information to the extant qualitative literature on differences in profits reported under US GAAP with those in the Netherlands, Sweden and the UK. This paper introduces Japanese companies to such analysis and seeks to add to both the qualitative an...

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Bibliographic Details
Published in:Accounting and business research 1993-10, Vol.23 (92), p.460-476
Main Author: Cooke, T. E.
Format: Article
Language:English
Subjects:
Accounting
Auditing
Financial reporting
Financial services
Financial statements
GAAP
Impacts
Japan
Profit
Profits
Statistical data
U.S.A
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Summary:Weetman and Gray (1991) sought to add quantitative information to the extant qualitative literature on differences in profits reported under US GAAP with those in the Netherlands, Sweden and the UK. This paper introduces Japanese companies to such analysis and seeks to add to both the qualitative and quantitative literature on profit comparisons. In attempting to undertake such work, the paper serves to highlight the difficulties of trying to compare financial statements in Japan with those published in the US and as a consequence the problem of undertaking quantitative analysis. On the basis of a case study approach, there is some evidence that the profits of companies prepared in accordance with Japanese GAAP are considerably more prudent than if prepared in accordance with US GAAP for companies operating in the financial sector. Such differences may not be so pronounced in the non-financial sector.
ISSN:0001-4788
2159-4260
DOI:10.1080/00014788.1993.9729891