The new Spanish accounting regulatory framework: a case study of accounting regulation change in a European economy in transition

Abstract

In this thesis the Spanish accounting regulatory framework is considered as a research case study. The main objective is to illustrate the issues faced by accounting systems in European economies in transition. Many Eastern European countries undergoing an economic transition have applied for European Union membership. The emergence of new accounting systems in these economies will be strongly influenced by the obligation to comply with European Union legislation and the Spanish case may offer some useful lessons.

Spain, as a case study, illustrates a European country that has undergone an economic transition in the last twenty-five years. The Spanish accounting regulatory framework has successfully undergone several changes in order to comply with European legislation and fit into a global market economy. The research case study comprises five sub-units of study.

Firstly, the activities of the Spanish government with regard to new accounting requirements as well as the changes experienced by the accounting standards-setting bodies exemplifies the important role of the government's response to European Union legislation.

Secondly, the evolution of accounting and professional bodies represents a society responding to the issues arising from the changes occurring at a national legislative level.

Thirdly, the unique interaction between the Spanish public and professional accounting bodies is an example of joint effort in times when rapid change is required and the amount of professional expertise may be limited.

The fourth sub-unit of study explores the role of the Spanish academic community which emerges as a full participant during the accounting reforms. Its influence in the new accounting regulatory framework is strongly felt through the increase in academic publications and with direct participation in the accounting standards -setting process.

Finally, the fifth sub-unit of study looks at the 'true and fair view' requirement which was adopted by the European Union's Fourth Directive in 1978 as the ultimate objective of financial reporting. The origins and history of 'true and fair view' have given rise to a considerable amount of academic debate on the issues stemming from its implementation by European national legislators. The Spanish decision to adopt this Directive in full shows the high degree of commitment to compliance with the European Union. The response of the Spanish government and the profession to a requirement alien to the Spanish accounting tradition and philosophy has been dramatic.

It is concluded that the changes in the accounting regulatory framework have not only been successful, but Spain has also embraced the European Directives in its national legislation to a greater extent than other European countries. The Spanish experience may therefore becorne a model to be looked to by Eastern European countries with an interest in becoming European Union members.