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Resistance to Changes
in Financial Reporting
Standards
Resistance to Changes
in Financial Reporting
Standards
By
Edel Lemus
Resistance to Changes in Financial Reporting Standards
By Edel Lemus
This book first published 2016
Cambridge Scholars Publishing
Lady Stephenson Library, Newcastle upon Tyne, NE6 2PA, UK
British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library
Copyright © 2016 by Edel Lemus
All rights for this book reserved. No part of this book may be reproduced,
stored in a retrieval system, or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording or otherwise, without
the prior permission of the copyright owner.
ISBN (10): 1-4438-9728-0

ISBN (13): 978-1-4438-9728-0
This book is dedicated to my wife, Annie,
and daughter, Isabella Rose Lemus, and family.
TABLE OF CONTENTS
LIST OF TABLES........................................................................................... xi
LIST OF FIGURES ....................................................................................... xiii
LIST OF APPENDICES .................................................................................. xv
ABSTRACT ................................................................................................ xvii
PREFACE ................................................................................................... xix
ACKNOWLEDGEMENTS .............................................................................. xxi
ABOUT THE AUTHOR ............................................................................... xxiii
CHAPTER ONE .............................................................................................. 1

WHAT ARE THE SIMILARITIES AND DIFFERENCES BETWEEN THE FINANCIAL
REPORTING STANDARDS UNDER GAAP VERSUS IFRS?
Evolution through History of U.S. GAAP and IFRS
Technical Differences between U.S. GAAP and IFRS
IFRS Investment Position in the U.S. Market
Adoption Impact of IFRS in the Higher Education Arena
Summary
CHAPTER TWO ............................................................................................. 9

CRITICAL ASPECTS BETWEEN EMH AND IFRS
Efficient Market Hypothesis (EMH) and IFRS
Principles-Based Historical Approach
IFRS and Corporate Governance
IFRS and Investors
IFRS and Global Stock Markets
IFRS and the Accounting Profession
IFRS and Higher Education
IFRS and Accounting Standards Setters
Arguments for and Against IFRS
viii Table of Contents
CPAs’ and CFOs’ Attitudes Toward the Harmonization

of International Accounting
Financial Quality of IFRS: Emerging Markets
Conceptual Framework: Convergence Efforts from GAAP to IFRS
FASB and IASB Joint Project––Revenue Recognition
USGAAP and IFRS Business Combinations: Phase II
Chronological Aspects of Business Combinations
Consolidation and Financial Reporting
Financial Reporting Theories
Business Combinations Road-Map Guidance
Accounting Treatment for Goodwill Reporting
Economic Association Event Decline in Sales and Profits
Decline in Sales and Net Income: Effects on Statement of Cash Flow
Economic Event and Accounting Disclosure
Announcement Made to the Public
Board of Directors and CEO
Business Combinations: IFRS3
Anglo-American Accounting Versus Asian Accounting
Asian Accounting
Japan: Accounting for Business Combinations
International Accounting Dimension in Japan
Anglo-American Accounting
Anglo-American Accounting Business Combinations
Applying the Acquisition Method
Lease Accounting Standards Under GAAP and IFRS
Summary
CHAPTER THREE ........................................................................................ 51

IS IFRS MANDATORY OR OPTIONAL IN THE U.S. MARKET? WHY?
Focus Review Findings
Theme 1: Accounting Standard Convergence Status
Theme 2: IFRS Adoption Challenges and SEC Road-Map
Theme 3: Accounting Technical Differences
Theme 4: IFRS in Higher Education
Theme 5: IFRS Capital Investment
Theme 6: IFRS Protecting Investors’ Assets
Individual Interview Findings
Resistance to Changes in Financial Reporting Standards ix

Focus Group versus Individual Interview Comparison
Summary
CHAPTER FOUR .......................................................................................... 89

IFRS GLOBAL ADOPTION
Discussion and Summary of Major Findings
Conclusions
Implications
Recommendations and Future Research
Summary
Definitions of Terms
REFERENCES .............................................................................................. 97
APPENDICES ............................................................................................. 109

LIST OF TABLES
Table 1: Theme 1: Focus Group Responses .............................................. 53
Table 7: Theme 1: Individual Interview Responses .................................. 64
Table 10: Theme 4: Individual Interview Responses ................................ 77

LIST OF FIGURES
Figure 1. The road to IFRS (Lemus, 2014, p. 2; Warren et al., 2014) ....... 12
Figure 2. Top 20 undergraduate and graduate programs in the United

States adopting IFRS in the accounting curricula ................................ 17
Figure 3. Countries that have officially adopted IFRS (Warren et al.,

2014, Exhibit 1, Appendix D-2)........................................................... 34
Figure 4. Countries that have officially adopted the IFRS (Warren et al.,
2014, Exhibit 1, Appendix D-2)........................................................... 48
Figure 5. Scope and degree of IFRS adoption by G-20 as of February

2012 (Steinbach & Tang, 2014, p. 35) ................................................. 55
Figure 6. IFRS convergence/adoption timeline (Koehn & Klimek, 2011,

p. 12) .................................................................................................... 68
Figure 7. Competitive landscape: Reporting standards used by aerospace

& defense companies (Deloitte, 2008). ................................................ 74
Figure 8. Grant recipients (Weiss, 2011, p. 63) ......................................... 76
Figure 9. IFRS by numbers (Pacter, 2015, p. 4) ........................................ 87

LIST OF APPENDICES
Appendix A. IFRS Timeline .................................................................... 109
Appendix B. IFRS Policy Choices Used in the Empirical Study ............ 111
Appendix C. IFRS Policy Choices .......................................................... 113
Appendix D. Comparison of Accounting ................................................ 115
Appendix E. Use of IFRS – The ‘Big Picture’ From 138 Profiles .......... 119
Appendix F. IFRS as of May 2011 .......................................................... 121
Appendix G. Standards as of January 1, 2015 ......................................... 125

PREFACE
The adoption of the IFRS has experienced dramatic changes in the

world’s financial market. The four chapters presented in this book begin
with the evolution of the U.S. GAAP and the IFRS, and the use of the
IFRS worldwide. Historically, the main objective behind the convergence
process, supported by the FASB and the IASB, is to improve the GAAP
and eliminate accounting technical differences.
Chapter 1 introduces the similarities and differences between the
financial reporting standards under the GAAP versus the IFRS. Chapter 2
explains the critical aspects between the EMH and the IFRS, and includes
19 critical areas that reveal the resistance to the change from the U.S.
GAAP to the IFRS. Chapter 3 focuses on answering the question of
whether the IFRS should be mandatory, or optional, in the U.S. market.
Chapter 4 contains a brief discussion of results, a summary of major
findings, conclusions, implications, recommendations for future studies,
and a final summary of the study and conclusions related to the findings.
Since President Barack Obama nominated Mary Jo White as
chairperson in the SEC, the adoption of the IFRS has not been a priority
(McEnroe & Sullivan, 2014). As written by Lemus (2014), “More than
450 non-United States companies, operating in the United States market,
are reporting under IFRS and hold a combined market cap of $5 trillion”
(p. 4). The potential significance of this book is to contribute to the
accounting practice to promote one singular accounting language and
support the capital orientation of principles-based standards. Therefore, it
will be beneficial for the SEC and the FASB to understand the benefits of
the early optional adoption of the IFRS by 2016.
The IFRS can be viewed in terms of accounting language as principles-
based standards and capital oriented. The critical aspects between the
EMH and the IFRS include 19 critical areas that explain the resistance to
change from the GAAP to the IFRS. The IFRS can also be viewed as
financial uniformity. More recently, 138 countries officially adopted the
IFRS as a singular reporting accounting language (See Appendix E).
Presently, 114 public companies were operating under the jurisdiction
financial requirement of principles-based standards. The combined GDP
of the IFRS is $41 trillion. The EU appears to have the highest number of
the IFRS adopters, and $24 trillion was reported from non-EU countries.
xviii Preface
Finally, the SMEs - operating in 69 different countries - are reporting

under the IFRS (Pacter, 2015).
Prof. Edel Lemus, DBA, MIBA

Albizu University, Florida, February, Thursday 4, 2016
ABSTRACT
IS IFRS MANDATORY OR OPTIONAL IN THE U.S. MARKET?

WHY? The purpose of this book is to investigate the resistance to change
from U.S. Generally Accepted Accounting Principles (GAAP), to
International Financial Reporting Standards (IFRS). The number of
countries that have officially adopted IFRS, as a singular accounting
language, is 138 (IFRS Foundation, 2013). The Securities and Exchange
Commission (SEC), the Financial Accounting Standard Board (FASB),
and the International Accounting Standard Board (IASB) have determined
that IFRS should be adopted optionally in the United States by 2016. The
book shows that IFRS should act as a singular accounting language, which
will promote high transparency and a better economic position in the
world financial market. Future research should focus on understanding the
cross-cultural psychological effects of the adoption of principles-based
standards and the relevance of corporate social responsibility by reshaping
economic and global political forces.
ACKNOWLEDGEMENTS
I would like to thank everyone for their strong commitment, support

and motivation, and, most importantly, for sharing their knowledge as a
contribution value upon completion of the book. The people that
motivated me to write this book are acknowledged in alphabetical order:
Orlando V. Abreu
Universidad de Cantabria
Kathleen Cornett
Argosy University
Otto F. von Feigenblatt

Nova Southeastern University
Pender B. Noriega
Argosy University
Miguel A. Orta
Nova Southeastern University
Gordana Pesakovic
Argosy University
Robert Rabidoux
Argosy University
Edward Recio
Georgetown University
Overall, I would like to acknowledge the above-mentioned people for

their intellectual capacity, influence, and encouragement.
ABOUT THE AUTHOR
Dr. Edel Lemus is the acting director, assistant professor, and

institutional business development professor for the Business Department
(School of Business) at Albizu University. Dr. Lemus has lectured at
several international universities, including Ramkhamhaeng University,
Bangkok, Thailand. Dr. Lemus has a BA in Accounting from Nova
Southeastern University; a Master’s Degree in International Business
Administration in Finance from Nova Southeastern University; and a
Doctorate of Business Administration (DBA) in Accounting from Argosy
University. Dr. Lemus’s primary research focus surrounds international
accounting; IFRS; international finance; international business; and new
venture capital investment. His research on IFRS has been published in
numerous journals, including Global Journal of Management and
Business Research; Journal of Alternative Perspectives in the Social
Sciences; Universidad Complutense (Madrid, Spain); Observatorio
Iberoamericano de la Economia y Sociedad de Japón; and ICL Journal
(New Zealand). In addition, he is a member of the editorial board of
several journals, such as ICL Journal.
His research was selected to be showcased at several international
conferences. Most recently, the international conferences attended were
the International Conference on Leadership and Governance (October 31,
2015, Palm Beach, Florida), and in the Caribbean, visiting Jamaica and
Haiti, for the 5th International Interdisciplinary Business-Economics
Advancement Conference - IIBA - (16-21 November, 2015, Ft. Lauderdale,
Florida, USA). Dr. Lemus also served as a member of the Scientific
Committee of Congreso Universitario Internacional Comunicacion.
Dr. Lemus has been affiliated with Albizu University as an Assistant

Professor of Business, and, more recently, as the Acting Director of the
Business Administration Program. In recognition of his multiple
achievements, Dr. Lemus was selected by his peers as the Mace Bearer for
the 2014 Carlos Albizu University Commencement Exercises.
In his current role in Albizu’s business program, Dr. Lemus is involved
in conceptualizing and creating an online Master’s in Business
Administration (MBA) program under Title V –Virtual Graduate Campus
Project.
xxiv Preface
During his years with Albizu University, Dr. Lemus has stood out for
his scholarly achievements and popularity, as well as for his kindness and
well-mannered demeanor. He has established solid relationships with other
directors, faculty, staff, and students.
Dr. Lemus is a Kentucky Colonel; he is a Texas Navy Admiral,
commissioned by the Governor of Texas (USA); he was elected
Academician of Social Sciences, Academician of the Nobilis Academia
Sancti Ambrosii Martyris Il; he is an honorary member of La Real
Sociedad De Amigeros De Espana,; and he is a recipient of the President’s
Lifetime Achievement Award for Education.
CHAPTER ONE1
WHAT ARE THE SIMILARITIES

AND DIFFERENCES BETWEEN THE FINANCIAL
REPORTING STANDARDS UNDER GAAP
VERSUS IFRS?
The worldwide adoption of the International Financial Reporting

Standards (IFRS) continues to be one of the most important issues in the
accounting profession. As research by Warren, Reeve, and Duchac (2014)
revealed, 127 countries have officially adopted the IFRS as a singular
accounting language. It is estimated that, by the next decade, the IFRS will
be adopted by 150 countries. The Securities and Exchange Commission
(SEC) has resisted changing from the U.S. Generally Accepted
Accounting Principles (GAAP) to the IFRS. The SEC and the Financial
Accounting Standard Board (FASB) have expressed a high degree of
concern regarding the adoption of the IFRS as a singular accounting
language in the U.S. market. The main objections to the adoption are the
following technical accounting differences that exist between the two
accounting standards:
x The importance of revenue recognition

x The lease accounting treatment
x The classification of impairment assets
x Accounting for stock based compensation
x The consolidation of financial statements under the IFRS (Elena,
Catalina, Stefana, & Niculina, 2009)
1
This chapter was originally presented at the 11th Argosy University Business
Conference Reinventing Recovery held in Sarasota, FL, USA.
2 Chapter One
Therefore, the United States was not expected to adopt the IFRS prior
to 2016 because the issues of accounting technical similarities, and
differences, remain unresolved under the two accounting standards.
Evolution through History of U.S. GAAP and IFRS

In 1447, Luca Pacioli, an Italian citizen, revolutionized the accounting
industry by introducing the two principal accounting memorandum
accounting books––the journal, and the ledger. By 1550, a new era began in
the accounting industry that expanded the forces of commercial and political
realities in the global arena. In the late 1700s, the French Revolution took
place and, at the same time, affected the Italian government’s accounting
system. According to Radebaugh, Gray, and Black (2006), “However, the
influence of the Arabs, Genoese, Florentines, and Venetians continues to
be felt in the double-entry system we use today” (p. 5). These influences
were attributed to the double-entry accounting system and the Industrial
Revolution from 1760 to 1830.
In the 1900s, there was a shift in the direction for market economies
and accounting standards; particularly due to the establishment of the
SEC, the stock exchange, the international new development phenomenon
of mergers and acquisitions, and the complexity of conducting business
overseas (Radebaugh et al., 2006).
According to Stephen (2005) - as presented through historical
chronological events - the implementation of the GAAP, in the U.S.
capital market, was a big breakthrough in the economic system. In 1930,
the American Institute of Accountants (AIA) implemented the GAAP as a
result of the failure of the stock market in 1929. Moreover, from 1932 to
1933, the AIA presented five principles in the market to regain investors’
financial confidence level. From 1934 to 1935, the SEC approved major
security legislation to bring financial sustainability into the investment
capital sector. As a result, in 1936, the AIA introduced the examination of
financial statements under the GAAP. In 1938, the SEC, for the first time,
established the conceptual analysis of accounting and auditing procedures
(Stephen, 2005).
In 1940, for the first time in history, the American Accounting
Association (AAA) evaluated and presented the historical cost theory in
the accounting education curriculum. In addition, in 1947, three
accounting inventory methods were introduced under ARB 29: First-in,
first-out (FIFO); last-in, first-out (LIFO); and the average cost method.
From 1947 to 1950, major changes occurred in the accounting industry,
and companies began to evaluate their assets. Furthermore, in 1954,
Similarities and Differences between the Financial Reporting Standards 3
Congress enacted the Internal Revenue Code to allow for the acceleration
of historical cost methods for income tax purposes only. As a result, from
1958 to 1960, the American Institute of Certified Public Accountants
(AICPA) established the Accounting Principles Board (APB). In the early
1960s, the board was examining the possibility of evaluating the fixed
assets of companies. From 1962 to 1963, Congress stimulated the
purchase of equipment by companies, and, by 1964, the APB issued
opinion number 5 by establishing the capitalization of leases through
finance. In 1967, the APB established the Financial Executives Institute
for major financial research investigation, as requested by the SEC.
Nevertheless, in 1968, the SEC requested immediate attention to analyze
cautiously the accounting precedents of the operational market economic
volatility. Therefore, in 1973, the FASB began operating in the accounting
industry by establishing rules and regulations - not just in the United
States, but operating universal principle accounting standards around the
world (Stephen, 2005).
In 1973, the International Accounting Standards Committee (IASC)
was established by an agreement. The leading professionals were from 10
different countries around the world, including Australia, Canada, France,
Germany, Ireland, Japan, Mexico, the Netherlands, the United Kingdom,
and the United States with the objective to formulate the International
Accounting Standards (IAS; Doupnik, & Perera, 2012). Moreover, in
2000, the IASC became the International Accounting Standard Board
(IASB), by substituting the IASC and increasing the effort of establishing
a new single financial reporting standard known as the IFRS.
In 2002, the European Union (EU) began studying the possibility of
adopting a new financial reporting system - the IFRS - by 2005. As a
result, in the process of the adoption of the IFRS in the EU, the IASB and
the FASB decided to approve the Norwalk Agreement, which represented
a remarkable moment in the implementation and adoption history of the
IFRS (Zhu, 2012).
In 2007, the SEC voted to accept the condition of reconciling financial
statements in accordance with IFRS principles. In 2008, the SEC gave a
road-map contingency plan to public companies in order to follow and
commence the financial statement consolidation process under the IFRS.
Later, in 2010, the SEC officially authorized the execution of the financial
statement consolidation contemplated under the principles-based IFRS
(Zhu, 2012). Therefore, the expected convergence from the GAAP to the
IFRS would take place as early as 2016 (Tyson, 2011).
4 Chapter One
Technical Differences between U.S. GAAP and IFRS

The accounting technical differences that exist between the GAAP and
the IFRS consist mainly in the approach of understanding two different
financial reporting and accounting systems. In addition, the GAAP is
considered rules-based and provides more detailed specifications of
business transactions, compared to the IFRS. Furthermore, the GAAP is
consistent with the jurisdictional, legal, economic, and social systems in
the United States. On the other hand, the IFRS is principles-based and is
designed to meet the social and economic needs of countries around the
globe.
For instance, the main differences that exist between the GAAP and
the IFRS are indicated to be in the legal, political, economic, and social
aspects. In order to measure the accounting technical differences that exist
between the GAAP and the IFRS, it is necessary to understand their
accounting objectives. The technical differences that exist between the
GAAP and the IFRS are as follows: The presentation of the financial
statements, the valuation of the balance sheet, and the recording
discrepancies under both standard setting standards among economic,
legal, and social diversity system aspects. The advantage of the IFRS is
that they enable an entity to capture different accounting interpretations
while conducting international business in sensitive avenues. Therefore,
the IFRS offer more latitude judgment and provide extensive disclosure
assumptions than the GAAP (Warren et al., 2014).
Since the SEC adopted the road-map convergence process to the IFRS,
three institutional bodies have been interested in the transition process
from the GAAP to the IFRS: (a) The government, (b) the accounting
industry, and (c) the accounting academia at higher education institutions.
In addition, the three institutional bodies are trying to understand the
transition process from the GAAP to the IFRS. The SEC wants the
implementation and adoption of the IFRS to take place as early as 2016.
Leaders of medium-sized and publicly-traded companies are extremely
concerned about the new accounting transition shift from rules-based to
principles-based because the IFRS offer more flexibility than the GAAP,
and, to some degree, the IFRS offer more freedom from the financial
reporting perspective than the GAAP.
Bandyopadhyay and McGee (2012) indicated that educators in the
higher education arena need to prepare for the new era of the IFRS. The
SEC remains optimistic about the convergence process from the GAAP to
the IFRS (Bandyopadhyay & McGee, 2012).
IFRS Investment Position in the U.S. Market

The main benefit of adopting the IFRS in the U.S. market would be in
attracting more investors from around the world by having one singular
accounting language in place. In addition, as companies continue
expanding their venture capital investment in the global arena, they need
more transparency in the disclosure of financial statements. The IFRS
would bring three important aspects to the U.S. market: (a) Sustainable
comparability, (b) expansion of the trading position of the market, and (c)
attraction of more investors to continue investing in the U.S. market (Bolt-
Lee & Smith, 2009). However, the IFRS have been posited to be more
capital oriented than the GAAP. Therefore, the IFRS might likely increase
the financial quality reporting position of the firm and investors in the U.S.
market (Bandyopadhyay & McGee, 2012).
There has been some delay in the adoption process of the IFRS in the
U.S. market. As illustrated, by McGee and Bandyopadhyay (2009), one of
the probable causes of this resistance is the cost of the process. The cost,
estimated by the SEC (as cited in McGee & Bandyopadhyay, 2009), for
those companies that would tentatively adopt the IFRS would be in the
range of $32 million in the filing of their financial statements in
accordance with 10-Ks, and $50 million for the complete conversion
proposed plan by the SEC.
However, companies, educators, and auditors in the United States are
not prepared for the new shift from the GAAP to the IFRS. Therefore, the
SEC wants to alleviate the negative effects of the adoption process of the
IFRS by allowing medium-sized companies to commence the early
adoption of the IFRS in 2016 (Bandyopadhyay & McGee, 2012).
An important aspect of the adoption of the IFRS, in the U.S. market, is
in having a singular accounting language system that would increase the
transparency level among investors in the U.S. market. In addition, the
greater the number of companies that adopt the IFRS, the greater the
chance of comparability and transparency within firms in the market
(FASB, 2008). Moreover, the majority of companies worldwide are
currently utilizing and adopting the IFRS.
Until 2005, the GAAP was the dominant source of setting rules and
regulations locally, as well as internationally. However, in 2005, the IFRS
gained a strong global market presence and the GAAP were no longer able
to dictate the dominant set of rules and regulations in the global financial
market. Therefore, one uniform accounting setting standard would help to
attract more foreign capital investment to the U.S. market (DeFond, Hu,
Hung, & Li, 2012).
6 Chapter One
Adoption Impact of IFRS in the Higher Education Arena

The accounting profession will experience a shift in education
standards due to the expected early adoption of the IFRS by 2016.
Researchers have evaluated the importance of universities adopting the
IFRS in their accounting curricula because accountant students should be
prepare to pass the IFRS in the CPA exam. Moreover, educators should
consider the need to incorporate the IFRS in the accounting curriculum. As
a result, according to Weiss (2011), new generations of accountant
graduates are expected to hold some degree of knowledge about IFRS.
Educators at business schools should gradually begin to incorporate
aspects of the IFRS into the curriculum because when accountant graduate
students complete the curriculum requirement they should be ready for the
early adoption era of the IFRS, expected to commence in 2016. For
example, the primary benefit of adopting the IFRS in the accounting
curriculum would be to better equip accountant students for the new
challenges that lie ahead (Razaee, Szendi, & Elmore, 1997). The new
challenges that would help new accountants are as follows: (a) Ensuring
accountant students develop a global-thinking approach about professional
recommendations; (b) ensuring accountant students become more
marketable in the market; (c) preparing accountant students to be
integrated into the global economy; and, (d) having accountant students
meet the requirement credentials of the Association to Advance Collegiate
Schools of Business (AACSB). Nevertheless, very little research has been
conducted in the adoption and convergence process of the IFRS in the
higher education arena. Therefore, educators should begin learning about
the new approach under the IFRS (Mintz, 2010).
For the past 5 years, the SEC has worked closely with the FASB and
the IASB in order to have a greater understanding of the transition process
from the GAAP to the IFRS. Educators in the higher education arena are
not ready for the transition from the GAAP to the IFRS. Educators should
begin to incorporate into the accounting curriculum, courses in IFRS
principles and standards in order to better prepare accountant students for
the changes to come in the accounting industry.
It is suggested, by this author, that educators in the United States do
not have the knowledge required to teach the IFRS principles and
standards. Therefore, empirical research studies recommend that the
adoption of the IFRS be considered in the first phase of changes to the
accounting curriculum in the higher education arena (James, 2011).
Summary
The importance of promoting the adoption of the IFRS is to bring
uniformity into the world financial market. The next chapter contains an
in-depth discussion of 19 critical aspects the SEC should evaluate prior to
the adoption of the IFRS in the U.S. market. Presently, the FASB is not
fully engaged in the convergence process. Historically, the main objective
behind the convergence process, supported by the FASB and the IASB, is
to improve the GAAP and eliminate accounting technical differences.
Since President Barack Obama nominated Mary Jo White as chairperson
in the SEC, the adoption of the IFRS has not been a priority (McEnroe &
Sullivan, 2014). As written by Lemus (2014), “More than 450 non-United
States companies, operating in the United States market, are reporting
under IFRS and hold a combined market cap of $5 trillion” (p. 4). The
potential significance of this book is to contribute to the accounting
practice, to promote one singular accounting language, and to support the
capital orientation of principles-based standards. Therefore, it will be
beneficial for the SEC and the FASB to understand the benefits of the
early optional adoption of the IFRS by 2016.
CHAPTER TWO1
CRITICAL ASPECTS BETWEEN EMH AND IFRS
The critical aspects between the EMH and the IFRS include 19 critical
areas that explain the resistance there is to the change from the GAAP to
the IFRS; the efficient market hypothesis (EMH) was examined because it
helped the author evaluate the financial crisis from 2007 to 2009 as related
directly to the comparability and transparency of the IFRS. The international
accounting arena suggests that the IFRS can be classified into three groups:
Anglo-Saxon, Continental European, and emerging economies.
Efficient Market Hypothesis (EMH) and IFRS

In 1965, Paul Samuelson formulated a rigorous theory known as the
efficient market hypothesis (EMH). According to Bodi, Kane, and Marcus
(2014), EMH suggests:
The prices of securities fully reflect available information. Investors
buying securities in an efficient market should expect to obtain an
equilibrium rate of return. Weak form efficient market hypothesis asserts
that stock prices already reflect all information contained in the history of
past prices. The semi strong-form hypothesis asserts that stock prices
already reflect all publicly available information. The strong form
hypothesis asserts that stock prices reflect all relevant information
including insider information. (p. G-4)
Bodi et al. further attested that the EMH creates arbitrage opportunities
and that competitors are driven by the dollar-value; they defined arbitrage
as “a zero-risk, zero-net investments strategy that still generates profits”
(p. G-1). Accountants and financial practitioners understand that
psychology heavily affects the decision-making process in the market. The
EMH appears to be consistent in the U.S. market, but inconsistent in the
1
This chapter was originally presented at the International Conference on
Leadership and Governance held in West Palm Beach, FL, USA.
10 Chapter Two
emerging economies market. Madura (2015) stated that some emerging

markets are new or small and, as a result, are unlikely to be as efficient as
the New York Stock Exchange (NYSE).
The IASB, prior to the 2007 and 2009 financial crises, found
inconsistencies in the accounting standards. The credit crisis from 2008 to
2009, in the United States, allowed the IASB to adjust International
Accounting Standards (IAS) and the IFRS, which were applicable to small
and medium-sized businesses (SMEs). The capital requirement and
contribution to the GAAP continued to escalate. For example, pro-cyclical
accounting is attributed to the fair-value measurement and to the treatment
of impairment assets. The pro-cyclical accounting effect helped reduce the
volatility in the financial statements and triggered the IASB to reclassify
the IAS under the IFRS (Ojo, 2010).
The credit crisis from 2008 to 2009 revived the harmonization process
between the FASB and the IASB because, over the past 10 years, the
globalization of accounting standards and corporate governance had been
important elements in the accounting industry. The United States found
systemic risk during the credit crisis. Madura (2015) defined systemic risk,
“as the spread of financial problems among financial institutions, and
across financial markets, that could cause a collapse in the financial
system” (p. 19). The United States has resisted the change from the GAAP
to the IFRS because the SEC does not want to encounter another systemic
risk in the Anglo-Saxon financial market. Political considerations reshaped
the infrastructure of the IFRS as a global accounting reporting language,
and the IASB proposed road-map guidance.
The top four auditing firms (Kranacher, 2012) indicated that adopting
the IFRS in the United States was an effective decision, as long as the
principles-based standard ensured financial comparability, and
compliance, among publicly traded companies. Therefore, China and India
continue to raise questions in the world financial market about their IFRS
adoption status (Ramanna, 2012). The financial credit crisis from 2007 to
2009 uncovered substantive accounting differences across the global
financial market, especially in countries reporting under principles-based
and rules-based standards (Madura, 2015).
The substantive accounting differences are found under the fair-value
accounting method. The IASB, and the EU, started reshaping the
accounting practice under the fair-value accounting measurement. For
example, in 2003, French and German banks protested with regard to the
mark-to-market accounting treatment under IAS32 and IAS39. Five
countries in the EU (i.e., Belgium, France, Italy, Portugal, and Spain) also
Critical Aspects between EMH and IFRS 11
resisted the adoption of the IFRS and expressed concerns about IAS39. On
the other hand, the UK maintained its faith for the capital market
institution and continued to support the fair-value measurement under
principles-based standards. Therefore, the fair-value accounting method
under principles-based standards continued to raise questions in the
emerging economies market (Ramanna, 2012).
Principles-Based Historical Approach

In 1904, as noted by Hui-Sung Kao (2014), the International
Federation of Accountants (IFAC) held its first meeting in St. Louis to
discuss the possibility of adopting a universal accounting standard. By
1973, representatives from the IASC began to develop the foundation of
the IFRS. The main objective of the IASC was to create one singular
accounting language to act as the main iGAAP. The new era of
globalization in the financial market caused a wake-up call in sectors, such
as business regulators, investors, finance, multinational corporations
(MNCs), and the four top global accounting firms (Poon, 2012).
In 1998, the IASC completed the first portion of a comprehensive IAS.
In 2002, the SEC recommended that publicly traded companies, which
were registered under the International Organization of Securities
Commission (IOSCO), should present comprehensive financial reporting
guidance under the IAS in order to prepare their financial statements in
accordance with the same (Poon, 2012).
The IASC understood the importance of creating the IASB and brought
in the IFRS project as a supportive road-map guide in the global financial
market. An IFRS timeline has been created in order to demonstrate the
important chronological events related to the IFRS being adopted
optionally in the United States (See Appendix A). In 2010, for the first
time in the accounting history, the IASC changed its name to the IFRS
when amending its own accounting constitution. The FASB, and the
IASB, issued a Memorandum of Understanding (MoU) - known as the
Norwalk Agreement - with the intent to help local multinational enterprises
meet their financial reporting needs (Poon, 2012).
The convergence process from the GAAP to the IFRS reshaped the
similarities and differences that existed between the two standards. For
example, in 2005, the IFRS were incorporated in the EU. By 2007, the
SEC permitted publicly traded companies, in the United States, to follow
the IFRS financial reporting principles-based guidance. In 2008, the SEC
granted permission to foreign companies, trading on the NYSE, to
consolidate financial results under the IFRS and not to consolidate their
12 Chapter Two
Figure 1. The road to IFRS (Lemus, 2014, p. 2; Warren et al., 2014).

financial statements under the GAAP. As a result, in 2008, the SEC

proposed a road-map in order to guide publicly traded companies, in the
United States, to comply with the IFRS reporting guidance. More than 120
countries have adopted the IFRS, and publicly traded companies have
begun to explore the benefits of the same (Poon, 2012).
Figure 1 illustrates a chronological event entitled, “The Road to IFRS,”
as in 2002, the SEC began road-map plan guidance toward the
harmonization process from the U.S. GAAP to the IFRS (Lemus, 2014, p.
2; Warren et al., 2014).
IFRS and Corporate Governance

Corporate governance has gained tremendous importance among
shareholders and stakeholders. According to Brigham and Ehrhardt
(2014), “Corporate governance can be defined as the set of laws, rules, and
procedures that influence a company’s operations and the decision its
managers make” (p. 528). For the past two decades, the adoption of the
IFRS has received a great deal of attention from the SEC and the FASB.
For instance, due to the numerous financial scandals in the financial
market, the SEC and the FASB attempted to prevent another Enron
scandal in the United States because the IFRS had more flexibility in terms
of financial reporting than the GAAP. The financial scandals in the global
financial market were guided by internal weak accounting reporting
processes. Local and global companies that adopt corporate governance
help prevent accountants from manipulating the financial statements
(Ajina, Bouchareb, & Souid, 2013).
For example, the aim of the IFRS as a singular accounting language is
to improve financial transparency and improve the working relationship
among markets. Since the IASB created the IFRS, and constructed the
conceptual framework of the IAS, the reporting disclosure among global
companies improved. Therefore, the main goals and objectives of the IFRS
are to promote transparent financial responsibility among accountants and
regulators, and promote economic stability without borders (Ajina et al.,
2013).
IFRS and Investors

Global investors claim that the IFRS, as a universal accounting
language, would improve the comparability of financial statements.
Investors are expected to understand the functionality of the IFRS. Despite
the convergence effort from the GAAP to the IFRS, technical accounting
14 Chapter Two
differences persist between the two accounting standards. For example -

under the IFRS - property, plant, and equipment are revaluated, but - under
the GAAP - compliance needs to be followed under historical cost. As a
result, the IFRS do not allow different accounting treatments for different
industry sectors as compared to the GAAP specific accounting standards
guidance provided per each industry sector (Poon, 2012).
The importance of the IFRS in the Anglo-Saxon market would require
more education in order for investors to facilitate an understanding of the
financial reporting standard guidance. For instance, empirical research
studies suggest that foreign investors hold a high degree of knowledge
under the local GAAP and IFRS. Therefore, the SEC would present a
work plan that suggests the level of understanding toward the IFRS work
compliance requirement (Poon, 2012).
In the global financial market, the portfolio holdings under the IFRS
are important because countries around the globe are communicating using
one singular accounting language. The IFRS act as a universal accounting
language (Aggarwal, Klapper, & Wysocki, 2005; Covrig, DeFond, &
Hung, 2007) and relate directly to mutual funds and institutional investors
that allocate more capital with efficiency across borders, and create a solid
market for private equity investment. Beneish and Yohn (2008) promulgated
that accounting systems in the convergence process from the GAAP to the
IFRS play a vital role. Therefore, practitioner accountants have indicated
the capital investment flow under the IFRS is likely to be less than it
would be under the GAAP (Hail, Leuz, & Wysocki, 2010).
IFRS and Global Stock Markets

In the European stock market, the IFRS created three important
principles: (a) Information efficiency; (b) market stability; and, (c)
adjustment to price. In a literature review conducted by Lambertides and
Mazouz (2013) of 20 European countries, results indicated the IFRS are
used as financial reporting guidance for 1,187 different stocks and were
expected to provide sustainability. Also, the researchers noted that the
IFRS enhances information efficiency and contributes to market stability.
Lambertides and Mazouz (2013) found that, across the European
market, the adoption of the IFRS would not affect stock performance.
Each country around the globe that had adopted the IFRS, as a singular
accounting reporting language, was expected to adjust the equity cost of
capital. Therefore, the IFRS - in common law countries - were expected to
increase the betas of stocks. On the other hand, civil law countries that
adopted the IFRS were expected to decrease the betas of stocks

(Lambertides & Mazouz, 2013).
Since the research paper written by Bekaert and Harvey (1995), studies
conducted in the finance literature have pointed out that global market
integration could be attributed to the correlation of market indices. The
IFRS bring high correlation and efficiency between two stocks by moving
in the same direction and applying a high degree of integration. Bekaert
and Harvey tested the market integration in twelve emerging economies
markets that utilized the IFRS finance correlation, and results indicated the
move to be efficient. Recent research studies that support the previous
method were found in the literature review of Heston and Rouwenhorst
(1994), Aydemir (2004), Chambet and Gibson (2008), and Eiling and
Gerard (2007). Therefore, those who invest in the NYSE should be aware
of the existing market regulations under the GAAP (Cai & Wong, 2010).
IFRS and the Accounting Profession

Since 1904, professional accountants in the United States have
expressed concern about the implications of adopting the IFRS. Certified
Public Accountants (CPAs) in the United States need to be trained under
the IFRS accounting system guidance because the level of understanding
and knowledge about IFRS is limited. The SEC indicated that the IFRS
professionals who practice accounting under a principles-based system
may elect accounting policies for better business practices. As a result,
IFRS practicing professionals are expected to possess strong governance
and leadership. The IFRS are expected to be the future for professional
accountants (Dulitz, 2009).
The acceptance of the IFRS continues to expand at a rapid pace. CPAs
need to be knowledgeable about the IFRS, although they are resisting
learning the principles-based standards of the iGAAP. On the other hand,
as soon as foreign companies commence filing their financial reports
under the IFRS, professional accountants in the United States will feel the
pressure of learning the same standards and institutional investors will
demand financial reporting clarity beyond the GAAP standards. Therefore,
the IASB suggests that, in order to ensure a smooth transition in the
convergence process, four sectors should commence the early adoption of
the IFRS: The business sector, information technology, the Internal
Revenue Service (IRS), and the NYSE (“International financial reporting
standards,” 2008).
16 Chapter Two
IFRS and Higher Education

The adoption of the IFRS in the United States will create a demand for
education and training because the CPAs will need to be trained under the
new accounting reporting language. For instance, publicly traded
companies, auditors, investors, and rating agencies argue that they will use
the IFRS if they have been fully trained under the same. Also, specialists
from management who are responsible for measuring assets and liabilities
need to be trained under the IFRS. All parties from different industries and
sectors need to undertake comprehensive training preparation under the
IFRS.
The majority of professional accountants are trained under rules-based
accounting, not principles-based. As a result, the IASB suggested
including the IFRS in the AICPA website publications, certificate
programs, and training material. As the convergence process from rules-
based to principles-based continues to advance, leaders of colleges and
universities are beginning to incorporate the IFRS into the accounting
curriculum. The SEC suggests that CPAs should be knowledgeable in the
principles-based accounting practice guidance (“International financial
reporting standards,” 2008).
The iGAAP encourages four fundamental principles of high quality
financial reporting standards, credible source of information, reliability,
transparency, and consistency (Kieso, Weygandt, & Warfield, 2013). The
IASB indicated that through the IFRS acting as one singular accounting
language, the main purpose is to surpass market efficiency across the
globe by fostering financial sustainability among emerging economies
markets and facilitating international integration. Education in international
accounting is relevant to the changes that are expected to come in the
accounting industry. For example, professional accountants are constantly
challenged to maintain high levels of competence and integrity in the
market, as well as serving the public interest. The vision and mission of
the International Federation of Accountants (IFAC) is to promote a solid
and universal accounting language among emerging economies markets,
versus developed economies. Therefore, the main objective of the IFRS is
to promote four principles: financial reporting quality, reliability,
transparency, and consistency (Hall & Bandyopadhyay, 2012).
Figure 2 illustrates (Bates, Waldrup, & Shea, 2011, p. 41) the top
twenty undergraduate and graduate programs in the United States adopting
IFRS into their accounting curricula (Rivero & Lemus, 2014, p. 48).
Figure 2. Top 20 undergraduate and graduate programs in the United States

adopting IFRS in the accounting curricula.
The SEC indicated that in the convergence process from the GAAP to
the IFRS, accountants, auditors, financial analysts, and investors need to
reinforce their accounting and financial skills related to a principles-based
language. Professional associations (Kroll, 2009), colleges, and
universities have started providing training material about IFRS. College
professors have suggested attending international accounting seminars on
a yearly basis. The top four auditing firms have arranged seminars that last
from one day to several days, on the subject of the convergence process
18 Chapter Two
from the GAAP to the IFRS. For example, Grant Thornton has international
accounting seminar courses and also brings in subject matter experts from
Canada. Deloitte Touché Tohmatsu offers free learning seminars online
about IFRS. PricewaterhouseCoopers (2010), in 2009, gave $700,000 in
grants to 26 colleges to expedite, and support, the learning process of the
IFRS. The AICPA announced that after January 1, 2011, students
majoring in accounting - who were seeking to sit for the CPA exam -
would face one section solely based on the IFRS (Moqbel,
Charoensukmongkol, & Bakay, 2013).
IFRS and Accounting Standards Setters

In 2008, the SEC presented a plan to guide publicly traded companies
in the United States, holding at least $700 million, to commence
consolidating their financial reports in accordance with the IFRS. The SEC
proposed that the top 500 publicly traded companies in the NYSE would
adopt the IFRS as early 2014. Small companies were expected to adopt the
IFRS from 2015 to 2016. Therefore, the optional official adoption of IFRS
began in January 1, 2014 (Liu & Hiltebeitel, 2010).
The SEC issued five key principles within the IFRS road-map guidance.
The first key principle was the transparency and clarity of IFRS acting as
one singular accounting language. The second key principle was the
quality of audit reports and financial reporting under the IFRS. The third
key principle was fund availability by the IASB to support the principles-
based adoption process. The fourth key principle was to compare publicly-
traded companies that consolidated their financial reports under rules-
based versus principles-based. The fifth key principle consisted of global
accountant regulators supporting the convergence process.
Accountant regulators need to offer comparability and consistency
under the IFRS. Auditors have noted that because the United States will, in
the near future, adopt the IFRS, accountant regulators need to provide
more auditing guidance under principles-based assurance. The governance
of the IFRS plays a vital role in the adoption process, and the IASB needs
to disclose the financial mechanism to the SEC. As a result, the top 500
publicly- traded companies in the NYSE will provide a consistent
approach toward the convergence process. Therefore, the SEC is expected
to create the necessary educational training programs to educate
accountants in the United States about IFRS (Jamal et al., 2010).
Arguments for and Against IFRS

Cathey, Schauer, and Schroeder (2012) presented ten arguments that
support IFRS in the U.S. market:
x The majority of publicly-traded companies in the United States

want to adopt the IFRS.
x The IFRS will restore public trust in the global financial market.
x The GAAP and the IFRS present similar points of view, in terms of
reliability and quality assurance.
x The majority of countries around the world prefer to adopt the
IFRS and not continue with their local GAAP.
x The SEC demands that the IASB ensure the IFRS offer a degree of
financial compliance in the Anglo-Saxon market.
x The adoption cost of the IFRS could be spread in different future
payments.
x The United States would not lose its sovereignty over the
accounting standards.
x The United States needs to adopt the IFRS voluntarily.
x The United States, by adopting the IFRS, would help to promote
the global economy.
x The majority of nations around the world share a mutual sentiment
toward the adoption of the IFRS acting as one singular language.
According to the SEC (2011), the FASB should focus its authority
efforts as follows:
x Be able to add disclosure requirements under the IFRS to achieve

greater financial consistency.
x To recommend that the IASB add under the IFRS, two or more
alternatives of accounting standards treatment.
x Issues that were not fully resolved under the GAAP or the IFRS
need to be resolved prior to the convergence accounting process.
Cathey et al., (2012), indicated that the adoption of the IFRS would
improve the financial reporting standards across the globe by providing
strong corporate governance, and international markets would be more
capital oriented. On the other hand, researchers have found there are
arguments against the IFRS. The twelve arguments against the IFRS are as
follows:
20 Chapter Two
x The IFRS will not adequately represent the world financial market.
x The convergence process from the GAAP to the IFRS will decrease
financial reporting quality in rules-based territories.
x There will be a possible lack of uniform accounting mechanism
throughout the world.
x The IFRS are more opinion oriented, rather than rules-oriented.
x The empirical research studies indicate the IFRS, in the United
States, would encounter the same cost adoption problem as
Sarbanes Oxley Section 404.
x The small companies that adopt the IFRS will suffer a high
financial burden.
x Accountant regulators argued that the IFRS are more flexible than
the U.S. GAAP.
x The GAAP is not superior to the IFRS, indeed both accounting
standards present pros and cons.
x There are accounting similarities and differences between the
GAAP and the IFRS.
x The IFRS proposes a different set of corporate governance
guidance as compared to the GAAP.
x The United States will lose influence over the GAAP.
x There is resistance in the United States in accepting a radical
accounting change, such as adopting the IFRS as a singular
accounting language.
Accountant regulators, and researchers in the accounting industry, have

indicated that once the SEC fully adopts the IFRS it is likely that the
financial reporting quality in the United States will decrease. As a result,
the IFRS will bring opinions from the principles-based accounting position
and increase earnings management. Therefore, the IFRS in the United
States are expected to face the same acceptance challenge as Sarbanes
Oxley Section 404 (Cathey et al., 2012).
CPAs’ and CFOs’ Attitudes Toward the Harmonization

of International Accounting
CPAs and CFOs have presented their professional points of view as to
whether it would be beneficial to adopt IFRS in the United States.
Research studies indicate there is a high acceptability of the IFRS around
the world. The overall professional attitudes of CPAs and CFOs toward
the harmonization process are positive. For instance, CPAs from other
countries are more optimistic than CPAs and CFOs from the United
States. CPAs in the United States appear to be more receptive than CFOs,
with respect to the financial reporting process under the IFRS (Barniv &
Fetyko, 1997).
McEnroe and Sullivan (2012) compared the attitudes of auditors and
CFOs in the United States and found that auditors would rather continue
with rules-based standards than move to principles-based standards,
because under IFRS there is room for ambiguity that could lead to
potential litigation. On the contrary, CFOs appear to support the IFRS
more than auditors, because the IFRS offer more financial reporting
flexibility as compared to the GAAP. CPAs and CFOs in the United States
agree that there are accounting technical differences between the GAAP
and the IFRS. Also, there is strong support for the GAAP and the IFRS
among professional accountants.
For example, results of the McEnroe and Sullivan (2012) survey study
revealed that 38% thought that rules-based standards would be cost
effective. On the contrary, the second part of the survey study illustrated
that 50% thought that principles-based standards would be cost effective.
The remaining 12% of respondents appeared to be somewhat neutral and
maintained faithful representation regarding the two standards. In terms of
commercial reality, 91% of the respondents indicated that the IFRS appear
to be consistent, while 56% mentioned that the rules-based standards
appear to be acceptable. Therefore, the majority of CPAs and CFOs attest
that the harmonization process would be beneficial for the United States
because it would help to attract more foreign investors and raise more
capital within international markets (McEnroe & Sullivan, 2012).
The SEC is likely expected to accept IFRS voluntarily and have in
place two different accounting standard settings. The rationale for having
in place two different accounting standard settings is to support the
accounting profession in the United States and reduce the adoption cost for
publicly-traded companies. In 2010, the SEC restructured the conceptual
framework of the two accounting standards acting as one singular voice in
the Anglo-Saxon market (McEnroe & Sullivan, 2012).
Financial Quality of IFRS: Emerging Markets

The international accounting arena suggests the IFRS can be classified
into three groups: Anglo-Saxon, Continental European, and the emerging
economies market. The new emerging economies markets are Brazil,
Russia, India, China, and South Africa (BRICS). For instance, the
Netherlands – interestingly - came closer to South Africa in terms of
Another random document with
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¹ Since my writing this, I have been told of a very singular
expedient made use of by Mr. Peter Boehler, one of the
brethren’s bishops, in order to strengthen the faith, and to
raise the drooping spirits of Mr. William Bell, who hath
been unhappily drawn in (with several others) to be one of
their agents. It was this: It being Mr. Bell’s birth-day, he
was sent for from his house in Nevil’s-alley, Fetter-lane;
but for a while, having had some words with Mr. Boehler,
he refused to come; at length he complied, and was
introduced into a hall, in the same alley, where was placed
an artificial mountain, which, upon singing a particular
verse, was made to fall down, and then behind it was
discovered an illumination, representing Jesus Christ
and Mr. Bell, sitting very near, or embracing each other;
and out of the clouds was also represented plenty of
money falling round Mr. Bell and the Saviour. This story
appeared to me so incredible at the first hearing, that,
though I could not doubt the veracity of the relator, yet
hearing he might be misinformed, I sent for him again, and
he assured me, that Mr. Bell told this story himself some
time ago in company, and a person of good reputation of
that company related it to an acquaintance of mine. May
God grant him and all others who have been
undesignedly concerned, a more sure and stable prop for
their faith, even his own word, in which he causes his
people to trust! then, and not till then, even upon the
greatest emergency, they may without any fanciful
representations, boldly say, “Who art thou, O great
mountain? before the Lord Jesus, our all conquering
Zerubbabel, thou shalt become a plain.”
² This Mr. Grace told me himself in public company; he and

Mr. Freeman do live in Throgmorton-street.
³ The case of this Mr. Rhodes is very singular. He was of
mean birth and occupation, but upon the unexpected
falling of many lives, became suddenly possessed of an
estate of above four hundred pounds a year; and to serve
the brethren, after many importunities, he was induced to
dispose of it. Mr. Lee the banker purchased it, and Messrs.
Freeman and Grace received six thousand pounds of the
money towards what was due to them: besides this, Mr.
Rhodes was bound for many thousands more. This made
him very uneasy, and fearing the consequence, he one
afternoon, about ten weeks ago, stole an interview with
two single brethren, and beseeched them, for Christ’s
sake, to let him have twenty-five pounds, for the payment
of which he left them his watch, bureau, horse and saddle.
He then took his leave, saying, in all probability he should
never see them any more, and having nothing to spare to
leave behind for his poor mother, (who I hear is since
dead) was content to send her a few parting lines: since
he has been gone, the horse, watch, bureau and saddle
were sold for twenty-seven pounds three shillings; so that
the young man has the balance in bank. God grant, that
this may prove the last person that may be imposed on in
this way!
These are but a few instances, my Lord, amongst many; indeed

too too many, that might be given. The brethren’s agents, and those
concerned with them, can best tell what horrid equivocations,
untruths and low artifices have been used, to procure money, at high
interest, wherever it was to be had, in order to keep up the brethren’s
credit; and in that poor lame manner, it hath been kept up for a
considerable time. Was the whole scene to be opened, I believe
every one would be of opinion, that such an ecclesiastical project,
never was heard of before, in any part of his Majesty’s dominions.
Of this, my Lord, the Royal-Exchange hath long since rung; and if

the same part hath been acted abroad, ¹ how many families must
have been ruined there, and how many more may be yet ruined, in
order to fill up the present English chasm; and consequently, what
loads of guilt must needs lie at the door of somebody? Surely, the
Lord of all Lords, whose eyes are like a flame of fire, and who
requires truth in the inward parts, will one day or other visit for these
things, by bringing to light the hidden things of darkness, and thereby
making manifest the counsels of the heart.
¹ It appears too plain from Mr. Rimius that this hath been
the case. And no wonder, since he quotes this assertion of
the Count’s from his own writings, “The œconomists of the
society may say to a young rich man, either give us all
thou hast, or get thee gone.”
I need not inform your Lordship, that Babels are generally

suffered to be built pretty high, before God comes down to confound
the language of the builders. If knaves are employed (as commonly
they are) God’s honour is concerned to discover them. And if any of
his own children are undesignedly drawn in, (which is frequently the
case) he, who hath promised not to suffer them to be tempted above
what they are able to bear, will in mercy, some way or other, rebuke
the tempter, and make a way for them to escape. It is true, this, in
public concerns, may sometimes expose them to a little worldly
contempt, and for a while they may seemingly be crushed under the
rubbish of the fallen fabric, but even this shall work together for their
good; and happy will it be for them, if after all, they at length learn
this important lesson, “That it is dangerous, upon any pretence
whatsoever, to go from the written word, or give up their consciences
to the guidance of any man, or body of men under heaven.” This,
your Lordship well knows, is what weak and unstable souls are too
apt to do; and artful and designing men, who are fond of power,
especially if naturally they are of an ambitious turn of mind, easily
catch at the pleasing bait. But honesty, my Lord, will be found to be
the best policy after all; and therefore, God forbid that any who call
themselves the followers of the Lamb, should glory in any thing save
the cross of Christ.
At present, I shall add no more, but earnestly say amen, to that

part of the brethren’s litany, however exceptionable in other respects,
“From untimely projects, and from unhappily becoming great, keep
us our good Lord and God!” And I as heartily pray, that the glorious
Jesus may prosper all that is right, and give grace to correct and
amend all that is wrong, among all his people of all denominations. I
subscribe myself, my Lord,
Your Lordship’s most obedient humble servant,
George Whitefield.
A SHORT
A D D R E SS
TO
Persons of all Denominations,

OCCASIONED BY THE
Alarm of an Intended Invasion, in the Year

1756.
I also will shew my Opinion.
Job xxxii. 10.
A SHORT
A D D R E S S, &c.
Men, Brethren, and Fathers,
T HOUGH so many alarming warnings, pathetic exhortations, and

suitable directions, have already been given both from the
press and pulpit, by way of preparatives to our late public day of
humiliation; yet should one, who is less than the least of all his
brethren, now that solemnity is over, presume to trouble his dear
countrymen with a short address, by way of supplement to what hath
already been offered; it is to be hoped, none will be so unkind as to
look upon it as altogether superfluous and needless, much less, be
so ungenerous as to censure it as proceeding from the pride and
naughtiness of his heart. But should this be the case, I shall make no
other apology (as I think there needs no other) than that which David
the youngest of the sons of Jesse made long ago upon a like
occasion, “Is there not a cause?”
An insulting, enraged, and perfidious enemy is now advancing

nearer and nearer to the British borders. Not content with invading
and ravaging our rightful Sovereign King George’s dominions in
America, our popish adversaries have now the ambition to attempt,
at least to threaten, an invasion of England itself; hoping, no doubt,
thereby, not only to throw us into confusion at home, but also to
divert us from more effectually defeating their malicious designs
abroad. That such a design (however chimerical it may seem) is now
actually on foot, the royal proclamation lately issued forth, renders
indisputable. Which proclamation, as it plainly bespeaks his
Majesty’s paternal care, doth at the same time loudly call upon all his
faithful and loving subjects, not only to stand upon their guard, but
also to exert their utmost efforts, in dependance on divine protection,
to prevent and render abortive such an unjust and daring enterprize.
Blessed be God! as a professing, though sinful people, we have

lately taken one effectual step towards bringing about such a
salutary end.
In obedience to a call from the throne, we have been humbling

ourselves in the most public and solemn manner before the most
high God. And it is to be hoped, that the many tears which were that
day shed, and the thousands and thousands of prayers that were
then offered up, have long since been regarded by, and entered into
the ears of the Lord of ♦Sabaoth. Infidels may perhaps laugh, and
make themselves merry with such an insinuation; but serious people
(and to such in a more peculiar manner is this address directed) will
account it no ways enthusiastic to affirm, that solemn humiliations,
whether performed by public communities in general, or individuals
in particular, have always met with such a divine acceptance, as to
obtain at least a reprieve from, if not a total removal of, the
threatened evil. The deferring of an impending judgment, only upon
the hypocritical, but public humiliation of a wicked Ahab; The mature
and providential deliverance of the Jewish people from the cruel plot
of an ambitious Haman, for which queen Esther, Mordecai, and the
other distressed Jews sought so earnestly by public fasting and
prayer: And what is yet more, the total and entire suspension of the
destruction of Nineveh, that exceeding great city, (though so
peremptorily denounced) upon the fasting, praying, and repenting of
the king, nobles and commons, at the preaching of Jonah. These,
not to mention many more that might be adduced from sacred story,
are most pregnant, and, at the same time, very encouraging proofs,
that they that humble themselves, shall in God’s due time be
exalted; and therefore, as a nation, we may boldly infer, that the
righteous Lord, who delights to shew himself strong in behalf of
those who are of an upright heart, will favour, plead, and vindicate
our righteous cause.
♦ “Sabbaoth” replaced with “Sabaoth”
I am very sensible, that artful insinuations have been

industriously published, in order to lay all the blame of this war upon
us. But bold assertions and solid proofs are two different things; for it
is plain, beyond all contradiction, that the French, fond of rivalling us
both at home and abroad, have most unjustly invaded his Majesty’s
dominions in America; and have also, by the most vile artifices and
lies, been endeavouring to draw the six nations of Indians from our
interest; in short, almost all their proceedings ever since the late
treaty of Aix la Chapelle, have been little else than preparations for,
or a tacit declaration of war. But he that sitteth in heaven, as we may
humbly hope, laughs them to scorn; and, as he once defeated the
counsel of Achitophel, and came down to confound the language of
those aspiring projectors who would fain have built a tower, the top
of which should reach even to heaven; so we trust (whatever dark
providences may intervene) that he will in the end frustrate the
devices of our adversary’s most subtle politicians, and speak
confusion to all their projects; who, by aiming at universal monarchy,
are more than attempting to erect a second Babel.
I have heard, or read somewhere of a Turkish General, who,

being called to engage with a christian army that had broken through
the most solemn ties, stood up at the head of his troops, and then
drawing the treaty which they had broken, out of his bosom, and
holding it up in the air, thus addressed the throne of heaven: “O
almighty Being, if thou art, as they say, thou art, these christians
God, thou lovest what is right, and hateth perfidy; look down
therefore and behold this treaty which they have broken; and, as
thou canst not favour what is wrong, render their arms, O God,
successless, and make mine victorious.” He ended; immediately the
sword was drawn. The two parties vigorously engaged, and the
perfidious christians were beaten off the field. Thus may our
protestant Generals, or at least their Chaplains, deal with our
enemy’s forces, in respect to the treaty of Aix la Chapelle. They, not
we, have broken it. They, not we, have been the aggressors: and
therefore, notwithstanding we are looked upon as heretics, and they
fight under the banner of one who stiles himself His most Christian
Majesty; a righteous God, we trust, in answer to prayer, will humble
France, and make the British arms both by sea and land, more than
conquerors through his love. It is true (and God knows with grief of
heart I speak it) praying is become too unfashionable amongst our
people in general, and among our military men in particular; but
wherein the piety, and consequently the true policy, of such a
♦procedure consists, I believe will be very difficult to determine. If we
have recourse to Rollin’s ancient history, I believe we shall find, that
neither Darius, Cyrus, Alexander, nor indeed scarce any of the
Egyptian, Grecian, Persian, or Roman Generals, ever undertook any
hazardous enterprize, without making some public acknowledgment
of a deity. And if we consult that history of histories, that too much
neglected book (as Sir Richard Steel expresses himself)
emphatically called the Scriptures, we may always remark, that
those heroic worthies, who by faith subdued kingdoms, and put to
flight the armies of the aliens, were men of prayer as well as men of
valour. And if our researches descend down to our own annals, we
shall soon be satisfied, that the British arms were never more
formidable, than when our soldiers went forth in the strength of the
Lord; and with a bible in one hand, and a sword in the other,
chearfully fought under his banner who hath condescended to stile
himself “a man of war.”
♦ “proceedure” replaced with “procedure”
Such an appellation as this, methinks, may sufficiently justify the

lawfulness of bearing arms, and drawing the sword in defence of our
civil and religious liberties. For if God himself is pleased to stile
himself a man of war, surely in a just and righteous cause (such as
the British war at present is) we may as lawfully draw our swords, in
order to defend ourselves against our common and public enemy, as
a civil magistrate may sit on a bench, and condemn a public robber
to death. Our excellent reformers, sensible of this, in the thirty-
second article of our church, after having declared “that the laws of
the realm may punish christian men with death for heinous offences;”
immediately subjoins, “that it is lawful for christian men, at the
commandment of the magistrate, to wear weapons and serve in the
wars.” And therefore, what Bishop ♦Sanderson says of study, may
be likewise said of fighting: “fighting without prayer is atheism, and
prayer without fighting is presumption.” And I would be the more
particular on this point, because through a fatal scrupulosity against
bearing arms, even in a defensive war, his Majesty hath been, and is
not yet out of danger of losing that large, extensive, and but lately
most flourishing province of Pensylvania, the very centre and garden
of all North America. But whilst I see such very scrupulous persons
grasping at every degree of worldly power, and by all the arts of
worldly policy labouring to monopolize, and retain in their own hands
all parts both of the legislative and executive branches of civil
government; to speak in the mildest terms, we may honestly affirm,
that they certainly act a most inconsistent, and if not prevented here
at home, to thousands of their neighbours, I fear a very fatal part.
For, say what we will to the contrary, if we search to the bottom of
things, we may soon be convinced, that civil magistracy and
defensive war must stand or fall together. Both are built upon the
same basis; and there cannot be so much as one single argument
urged to establish the one, which doth not at the same time
corroborate and confirm the other.
♦ “Saunderson” replaced with “Sanderson”
Far be it from me, who profess myself a disciple and minister of

the Prince of peace, to sound a trumpet for war: but when the
trumpet is already sounded by a perfidious enemy, and our king, our
country, our civil and religious liberties, are all, as it were, lying at
stake, did we not at such a season lend our purses, our tongues, our
arms, as well as our prayers, in defence of them, should we not
justly incur that curse which an inspired Deborah, when under the
immediate influence of the Holy Spirit, once uttered, “Curse ye
Meroz, curse ye bitterly the inhabitants thereof, because they came
not to the help of the Lord, to the help of the Lord against the
mighty?” Known unto God, and God alone, are all our hearts. Daily
and repeated experience convinceth us, that the greatest talkers are
not always the greatest doers. How therefore any of us may behave
when put to the trial, the trial itself can only prove. But, for my own
part, whatever my future conduct may be, (and I know it will be
downright cowardly, if left to myself) yet, upon the maturest
deliberation, I am at present so fully convinced of the justice of the
British cause, that supposing it should be said of me, as it is of
Zwinglius, “Cecidit in prœlio, He fell in battle;” I hope, if whilst the
silver cords of life were loosing, and I should be attended by any who
may be bewailing mine, as the friends of Zwinglius did his
misfortune, I should like him cry out, “Ecquid hoc infortunii? Is this a
misfortune?” And not only so, but with my expiring breath add, as he
did, “O faustum infortunium! O happy misfortune!” For, surely, it is far
more preferable to die, though by a popish sword, and be carried
from the din and noise of war by angels into Abraham’s bosom, than
to be suffered to survive, only to drag on a wearisome life, and to be
a mournful spectator, and daily bewailer of one’s country’s ruin.
Awful and tremendous are the judgments that have lately been
abroad. Twice hath the earth on which this great metropolis stands,
unable, as it were, any longer to sustain the weight of its inhabitants
sins, been made to tremble and totter under us. Since that, how
amazingly hath the shock been extended! Africa, (nor hath America
itself been exempted) hath in a most destructive manner felt its dire
effects. And what a dreadful consumption it hath made in various
parts of Spain, and, in a more especial manner, at Lisbon, the
metropolis of Portugal, is beyond conception, and beyond the power
of the most masterly pen to describe. It is to be questioned, whether
the like hath ever been heard of since the deluge. Surely nothing
was wanting to figure out, and realize to that distressed people the
horror of the last day, but the sound of the trump, and the actual
appearance of the great Judge of quick and dead. But awful and
tremendous as such phænomenas of nature may be; yet, if we
consider the consequences of things, was even the like judgment to
befal us, (which may God avert!) it would be but a small one, in
comparison of our hearing that a French army, accompanied with a
popish Pretender, and thousands of Romish priests, was suffered to
invade, subdue, and destroy the bodies and substance, and, as the
necessary consequences of both these, to blind, deceive, and
tyrannize over the souls and consciences of the people belonging to
this happy isle.
God forbid, that I should give flattering titles to any; for in so

doing, I should provoke him to take away my soul. But surely we
must have eyes that see not, and ears that hear not, as well as
hearts that do not understand, if we do not know, and see, and feel,
that in respect to our civil and religious liberties, we are undoubtedly
the freest people under heaven. And I dare appeal to the most
ungrateful and malicious malecontent, to produce any æra in the
British annals, wherein we have enjoyed such a continued series of
civil and religious liberty, as we have been favoured with for these
twenty-eight years last past, under the mild and gentle administration
of our dread and rightful Sovereign King George. Surely he hath
been a nursing father to people of all denominations; and however
he may be denied it, yet he may, without a compliment, justly claim
from the present, as well as future ages, the deserved title of
George the Great. But notwithstanding this, such is the
degeneracy of human nature, it must necessarily be expected, that,
in a nation grown wanton with liberty like ours, there are a great
multitude of unhappy persons, who being men of lax principles,
loose lives, and broken fortunes, will be so abandoned, as to break
through all restraints of gratitude, loyalty and religion; and, like
Cataline and his wicked confederates, be fond of joining in any
change of government, whereby they may entertain the most distant
prospect of bettering their fortunes, and gratifying their ambition,
though it be at the expence of their country’s blood. This hath been,
and no doubt still continues to be, the fate of all civil governments in
the world, and consequently is no more than what we may expect, in
times of tumult and danger, will be acted over again in our own land
by men of such corrupt minds. But how any serious and judicious,
much less religious and devout person, can be so stupid to all
principles of self-interest, and so dead even to all maxims of
common sense, as to prefer a French to an English government; or a
popish Pretender, born, nursed, and bred up in all the arbitrary and
destructive principles of the court and church of Rome, to the
present protestant succession settled in the illustrious line of
Hanover, must be imputed to nothing else but an awful infatuation.
Hear ye, (if there be any into whose hands this address may fall,
that are desirous of such a change) not to dwell entirely upon the
many innumerable civil or temporal losses we should sustain: hear
ye, I say, the mild and gentle language of one or his Most Christian
Majesty’s late declarations concerning religion.
“Being informed, that there have sprung up, and still are springing
up, daily in our realm, a great number of preachers, whose sole
business is to stir up the people to rebellion, and to dissuade them
from the practice of the Roman catholic and apostolic religion; we do
command that all preachers, who shall call assemblies, preach in
them, or discharge any other function, be put to death; the
punishment appointed by the declaration in July 1686, for the
minister of the pretended reformed religion, which we would not, for
the future, have any one esteem a mere threatening, which will not
be put in execution. We do likewise forbid our subjects to receive the
said ministers or preachers, to conceal, aid, or assist them, or have,
directly or indirectly, any intercourse or correspondence with them.
We farther enjoin all those, who shall know any of the said
preachers, to inform against them to the officers of the respective
places; the whole under pain, in case of trespass, of being
condemned to the gallies for life, if men; and, if women, of being
shorn, and shut up the remainder of their days in such places as our
judges shall think expedient; and whether they be men or women,
under pain of confiscation.”
After perusing this, read, read also, I beseech you, the shocking
accounts of the horrid butcheries, and cruel murders committed on
the bodies of many of our fellow-subjects in America, by the hands of
savage Indians, instigated thereto by more than savage popish
priests. ¹ And if this be the beginning, what may we suppose the end
will be, should a French power, or popish Pretender, be permitted to
subdue either us or them? Speak, Smithfield, speak, and by thy
dumb, but very persuasive oratory, declare to all that pass by and
over thee, how many English protestant martyrs thou hast seen
burnt to death in the reign of a cruel popish Queen, to whom the
present Pretender to the British throne at least claims a kind of a
distant kindred? Speak Ireland, speak, and tell if thou canst, how
many thousands, and tens of thousands of innocent unprovoking
protestants were massacred in cold blood by the hands of cruel
papists within thy borders, about a century ago? Nay, speak Paris,
speak, (for though popish, on this occasion we will admit thy
evidence) and say, how many thousands of protestants were once
slaughtered, on purpose, as it were, to serve up as a bloody dessert,
to grace the solemnity of a marriage-feast. But why go we back to
such distant æras? Speak, Languedoc, speak, and tell if thou canst,
how many protestant ministers have been lately executed; how
many more of their hearers have been dragooned and sent to the
gallies; and how many hundreds are now, in consequence of the
above-mentioned edict, lying in prisons, and fast bound in misery
and iron, for no other crime than that unpardonable one in the
Romish church, “hearing and preaching the pure gospel of the meek
and lowly Jesus.”
¹ See a pamphlet, intitled, A brief View of the Conduct of

Pensylvania, for the Year 1755.
And think you, my dear countrymen, that Rome, glutted as it were

with protestant blood, will now rest satisfied, and say, “I have
enough!” No, on the contrary, having, through the good hand of God
upon us, been kept so long fasting, we may reasonably suppose,
that the popish priests are only grown more voracious, and (like so
many hungry and ravenous wolves pursuing the harmless and
innocent flocks of sheep) will with double eagerness pursue after,
seize upon, and devour their wished-for protestant prey; and,
attended with their bloody red-coats, those gallic instruments of
reformation, who know they must either fight or die, will necessarily
breathe out nothing but threatening and slaughter, and carry along
with them desolation and destruction in all its various shapes and
tortures, go where they will.
But I humbly hope, vile as we are, a gracious, long-suffering and

merciful God, will not suffer us to fall into their blood-thirsty and cruel
hands. He hath formerly most remarkably interposed in England’s
favour; and why should we in the least doubt, but that he will again
reveal his omnipotent arm, and make our extremity to be his
opportunity, to help and defend us, against such threatening and
unjust invaders? Invincible as the Spanish armada was supposed to
be, and all-powerful as the Pope, under whose broad seal they
acted, might boast he was in heaven or hell, it is plain he had no
power over the water. “For thou didst blow, O Lord, with thy wind,
and the enemy was scattered.” And is not this God the same now as
he was yesterday? And will he not continue the same for ever? Of
whom then should the inhabitants of Great Britain be afraid? Blessed
be God, if we look to second causes, we have a glorious fleet, brave
admirals, a well-disciplined army, experienced officers, and, if
occasion should require, thousands and thousands of hearty
voluntiers, with a Royal Hero, who hath once been made happily
instrumental to save his country from impending ruin, if not Majesty
itself prepared to head them. And if by fasting from as well as for sin,
and by flying, through a living faith, to the merits of a dying, risen,
ascended and interceding Mediator, we can but make God our
friend, we need not fear what France and Rome, and Hell, with all
their united force, can do unto, or plot against us. The way of duty is
the way of safety, And if we are but found in the due use of proper
means, we may confidently leave the issue and event of things with
God. Be that event what it will (and I trust it will be a prosperous
one) we have a divine authority to say unto the righteous, it shall be
well with them. God’s own people, amidst all the wars and rumours
of wars, may rest secure; for they not only dwell under the shadow of
the most High, but have his own royal word for it, that all things shall
work together for their good. And not only so, but they may be fully
assured, that all the malicious efforts and designs of men and devils
shall be so far from obstructing, that, on the contrary, through the
sure, though secret hand of an ever-watchful, over-ruling, and
omnipotent providence, they shall at present, (howbeit they think not
so) be made not only to subserve the present further enlargement of
his interests, who, in spight of all the strivings of the potsherds of the
earth, will hold the balance of universal monarchy in his own
hands; but at last shall terminate in the full and compleat
establishment and perfection of that blessed kingdom, whose law is
truth, whose king is love, and whose duration is eternity. Fiat! Fiat!
Amen and Amen.
A
P R E FA CE
TO THE
S E R I O U S R E A D E R,
On Behalf of
The Rev. Samuel Clarke’s Edition of the

Bible.
P R E F A C E, &c.
W HEN Philip the Evangelist was commanded by the Holy Spirit,
to go near and join himself to the chariot of a man of
Ethiopia, and found him reading Esaias the prophet, we are told,
Acts viii. verse 30. that he introduced himself with this question,
“Understandest thou what thou readest?” The Ethiopian, though an
eunuch, a person of great authority under Queen Candace, instead
of being offended at this seeming impertinence, mildly answered,
verse 31. “How can I, except some man guide me?” And as a proof
of his willingness to be guided, he desires Philip that he would come
up and sit with him. Upon which, as we are further informed,
verse 35. “Philip opened his mouth and began at the same
scripture,” which the eunuch was then providentially reading, “and
preached unto him Jesus.” An instructive passage this! Not merely
as it shews us, that the greatest personages ought not to think
themselves above perusing God’s lively oracles; but also as it points
out to us that teachable and child-like disposition, with which all
ought to come to the reading of them; as well as the care which the
Holy Spirit of God takes, to furnish such as have a mind to do his
will, with proper instructors, that they may know it. “The meek will he
guide in his way.”
Now what the Evangelist Philip was then to this devout Ethiopian,
that, spiritual and gospel commentators are to us now. For though
the grand lines of our christian faith and practice, are written in such
plain and legible characters, “that he who runs may read;” yet if we
duly search the scriptures, we shall find many things both in the Old
and New Testament, into the due knowledge of which, we have need
of some men, or of some good men’s works, to guide us. Various
and abundant are the helps of this kind, with which the present age
and people of this land are favoured; but amongst them all, in my
poor opinion, next to holy Mr. Mathew Henry’s incomparable
comment upon the Bible; the Reverend Samuel Clarke’s Old and
New Testament with annotations, seem to be the best calculated for
universal edification. For they contain, though a short, yet (generally
speaking) a full and spiritual interpretation of the most difficult words
and phrases. A great many parallel scriptures, both as to matter and
words, are most judiciously inserted. To this is added, an analysis, or
the contents not only of near every book and chapter, but of almost
every verse of every chapter in the whole Bible: and yet the notes
and references are so disposed in the manner of printing, that the
reader, if he hath no time for a further enquiry, may read the bare
text without any interruption, or if but little time, he may almost with a
single glance, see the meaning of any particular word, phrase, or
passage, as he goes along. It must be confessed, indeed, that in the
former editions, a few expressions in the explanatory notes seemed
not so unexceptionable; but then it must be observed, that they were
but few, and those in this edition, as I am informed, are for the most
part corrected. It may be, that the curious and very critical reader
may meet with some few that may have escaped present notice. But
alas! if we forbear reading any book or comment, ’till we meet with
one that will suit every taste and is liable to no exception, I fear we
must never read at all. The best of mens books, as well as the best
of men, are but men and the books of men, at the best: it is the
peculiar property of thy life, and of thy book, O blessed Jesus! to be
exempt from all real imperfections. Happy they who both in their
writings and conduct come nearest to thy divine copy, and most
blessed example!
If it should now be enquired who this Reverend Samuel Clarke

might be? Must I tell thee? He was one of the many worthies who
were ejected by the black Bartholomew act. But let not this startle
thee, courteous reader; for thou wilt here find no disputes about
church government, no controversy about rites or ceremonies; but
(as far as I am capable of judging) the mind of the ever-blessed
God, opened and explained in a manner equally necessary and
useful for all serious christians of all denominations. As such, I have
spoken of it, both from the pulpit, and in private conversation, many
years ago; and if any thing I have said, hath been, or shall be, in the
least instrumental in promoting its present publication, or future
usefulness, whatever exceptions may be made by persons of
different sentiments, I shall look upon it as an honour conferred upon
me, by our great and common Lord.
At the same time, I must confess, it gave me pleasure about a

year ago, to find this very book recommended in the strongest
manner, in the second volume of Dr. Calamy’s lives. His words are
these, “I cannot forbear here adding a particular account of the Bible
which he published. He first formed the design in his younger years,
in the university; and made it the work of his most retired leisure, and
solemn thoughts. It ripened with years and experience, and was the
result of great reading and consideration, both of the best practical
writers and the most celebrated criticks. It is a work of great
exactness and judgment; commonly fixes on the true sense of the
place; diligently observes the connection of things; freely represents
the principal matters that ♦occur; and contains the fullest account of
parallel places, of any other extant.” He was so happy in this
performance, as to obtain the concurring testimony of two great and
excellent men, who were thought to have different sentiments of
some points of religion; viz. Dr. Owen and Mr. Baxter in their
respective epistles before the quarto edition of the New Testament.
The words of the former are remarkable. “But this I must say, that to
the best of my understanding, he has made his choice of the
especial sense which he gives of the word, in all places, with great
diligence and judgment. And it is evident, that in the whole, he has
so carefully and constantly attended to the analogy of faith, that the
reader may safely trust to him, without fear of being led into the
snare of any error, or unsound opinion.” The words of the latter are:
“And I especially commend it as orthodox, in explaining those texts
which meddle with justification, remission of sin, with faith and works,
and such great and practical points of doctrine; so that the reader
need not fear the corrupting his understanding, by any secret
insinuation of errors, or dangerous mixture of private, and unsound
opinions.” Since both of them, herein freely expressed their proper
sentiments, it is scarce conceivable how there could be any very
important difference remaining between them. But be it as it will as to
that; this was in a manner the work of Mr. Clarke’s life, and bears the
lively signatures of his exact learning, singular piety, and
indefatigable industry; and has been valued by good judges of
different sentiments and persuasions, considering the brevity of the
parts, and intireness of the whole, as the best single book upon the
Bible in the world.
♦ “occcur” replaced with “occur”
To these may be added the joint opinions of Dr. Bates and Mr.
How, who thus expressed themselves. “Having seriously perused
this laborious work, we cannot but judge, the usefulness will answer
the author’s great industry; whose excellent skill hath with that
conciseness, and yet clearness, given the mind of God in the sacred
oracles of the New Testament, that we cannot doubt, but God will
render it serviceable, to the edifying of conscientious and humble
readers, in knowledge, faith and obedience.” If it should be objected

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Resistance to Changes in Financial

Reporting Standards 1st Edition Edel

Interpretation of International Financial Reporting

International Financial Reporting Standards

Financial Reporting & Analysis Lawrence Revsine

Financial Reporting, 3rd Edition Janice Loftus

Financial Reporting, Financial Statement Analysis and

A History of Corporate Financial Reporting in Britain

International Financial Reporting & Analysis, 8th

Living Standards in Southeast Asia Changes over the

This book first published 2016

Cambridge Scholars Publishing

Lady Stephenson Library, Newcastle upon Tyne, NE6 2PA, UK

British Library Cataloguing in Publication Data

Copyright © 2016 by Edel Lemus

ISBN (10): 1-4438-9728-0

LIST OF FIGURES ....................................................................................... xiii

LIST OF APPENDICES .................................................................................. xv

ABSTRACT ................................................................................................ xvii

PREFACE ................................................................................................... xix

ACKNOWLEDGEMENTS .............................................................................. xxi

ABOUT THE AUTHOR ............................................................................... xxiii

CHAPTER ONE .............................................................................................. 1

CHAPTER TWO ............................................................................................. 9

CPAs’ and CFOs’ Attitudes Toward the Harmonization

CHAPTER THREE ........................................................................................ 51

Theme 5: IFRS Capital Investment

CHAPTER FOUR .......................................................................................... 89

APPENDICES ............................................................................................. 109

Table 1: Theme 1: Focus Group Responses .............................................. 53

Table 2: Theme 2: Focus Group Responses .............................................. 56

Table 3: Theme 3: Focus Group Responses .............................................. 58

Table 4: Theme 4: Focus Group Responses .............................................. 60

Table 5: Theme 5: Focus Group Responses .............................................. 61

Table 6: Theme 6: Focus Group Responses .............................................. 63

Table 7: Theme 1: Individual Interview Responses .................................. 64

Table 8: Theme 2: Individual Interview Responses .................................. 69

Table 9: Theme 3: Individual Interview Responses .................................. 72

Table 10: Theme 4: Individual Interview Responses ................................ 77

Table 11: Theme 5: Individual Interview Responses ................................ 78

Table 12: Theme 6: Individual Interview Responses ................................ 80

Figure 2. Top 20 undergraduate and graduate programs in the United

Figure 3. Countries that have officially adopted IFRS (Warren et al.,

Figure 5. Scope and degree of IFRS adoption by G-20 as of February

Figure 6. IFRS convergence/adoption timeline (Koehn & Klimek, 2011,

Figure 7. Competitive landscape: Reporting standards used by aerospace

Figure 8. Grant recipients (Weiss, 2011, p. 63) ......................................... 76

Figure 9. IFRS by numbers (Pacter, 2015, p. 4) ........................................ 87

Appendix A. IFRS Timeline .................................................................... 109

Appendix C. IFRS Policy Choices .......................................................... 113

Appendix D. Comparison of Accounting ................................................ 115

Appendix F. IFRS as of May 2011 .......................................................... 121

Appendix G. Standards as of January 1, 2015 ......................................... 125

The adoption of the IFRS has experienced dramatic changes in the

Finally, the SMEs - operating in 69 different countries - are reporting

Prof. Edel Lemus, DBA, MIBA

IS IFRS MANDATORY OR OPTIONAL IN THE U.S. MARKET?

I would like to thank everyone for their strong commitment, support

Otto F. von Feigenblatt

Overall, I would like to acknowledge the above-mentioned people for

Dr. Edel Lemus is the acting director, assistant professor, and

Dr. Lemus has been affiliated with Albizu University as an Assistant

WHAT ARE THE SIMILARITIES