A Theory Documenting the Feasibility of a Global Capital Market from an Accounting Perspective

摘要

Paper proposes a theory for testing the feasibility of a global capital market from an accounting perspective. The theory connects the area of accounting regulations and the place where the result of their application is put into use, namely the capital market. Quantifying this connection is done indirectly, by using two direct connections. Firstly there is quantified the similitude degree of the considered accounting regulations based on a detailed content analysis. Secondly there is quantified to what extent the foresights of the considered accounting regulations are actually used in practice by companies being listed on the capital market. Once determined the two correlations there is derived the link between a certain capital market and a set of accounting regulations that is different from the one officially being applied by companies listed in the considered market. The proposed theory is tested by considering accounting regulations issued by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) and companies being listed on the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE), focusing on financial assets' measurement. Paper concludes by validating the proposed theory based on the fact that we have dimensioned a conceptual and methodological algorithm that was applied and generated results allowing the interpretation of the feasibility of a global capital market between financial reporting theory and practice.