International finance project

Lancaster University’s Department of Accounting and Finance has been successful in its bid for over two million Euros for an international project to harmonise financial reporting across Europe.

The department, based in the Management School, will work with nine other universities on the European Commission-funded Marie Curie Research Training Network.The four-year project aims to examine the introduction of International Financial Reporting Standards (IFRS) across Europe.Since 2005, the EU has required publicly-listed European companies to prepare financial statements using IFRS instead of the accounting rules specific to each country.

Professor Peter Pope will lead the team at Lancaster and also act as Network Co-ordinator in developing doctoral training opportunities and research initiatives.
He said: “This development is a key element in the creation of an integrated market in financial services. The harmonisation of financial reporting around IFRS should increase the comparability of corporate financial performance and lead to considerably greater financial transparency and accountability.
“Potential benefits include a reduction in firms’ cost of capital, enhanced investor protection, and better informed stakeholders, including creditors and employees.
“If these predictions are correct, then the efficiency of the European economy could improve significantly.”

But he warned that the benefits of adopting IFRS will only be realised if countries across Europe comply with the new rules, which is why the Network is needed to research the implications of the regulations.

The other universities involved in the project include Tilburg University (Holland), JW Goethe University in Frankfurt (Germany), HEC School of Management (France), University of Valencia (Spain), University of Porto (Portugal), University of Cyprus, University of Ljubljana (Slovenia), Varna University of Economics (Bulgaria) and the University of Macedonia (Greece).