Feature Article A regional study of listed companies’ compliance with international accounting standards Greg Tower, Phil Hancock and Ross H. Taplin Submitted 6 October 1998, revised 6 January 1999, accepted 10 January 1999 Abstract The move towards international harmonisation of accounting standards has dominated the work programme of the Australian Accounting Stan- dards Board in the past two years. Some have expressed concern that Aus- tralia is moving too quickly towards harmonisation when compared to other countries. This paper examines the extent of compliance with Inter- national Accounting Standards (IAS) in six countries in the Asia-Pacific region. By providing evidence as to the level of compliance with IAS in financial statements, the paper also indicates the extent of de-facto har- mony. The paper also examines various determinants of compliance with IAS and finds that country of location remains the clear driving force. Introduction The market capitalisation of the world’s major developed stock markets tripled from three to ten trillion US dollars from 1983 to 1992 (Radebaugh and Gray 1997). However, differences in accounting prac- tices among countries are regarded as large impediments to inter- national trade and business expansion (Choi and Mueller 1984). Dis- similarities in national accounting standards and company reporting practices distort financial information and reduce the level of effective communication to user groups. Investment funds now frequently flow across country borders and there is a clear movement towards a single international market and growing global pressures for more comparable financial information for companies. Accounting standards have economic consequences that can directly affect share prices. Accounting standards can cause the following effects: increased volatility in the net income figure, changing financial ratios and possible violations of debt covenant agreements. Greg Tower is Associate Professor in Accounting, Phil Hancock is Associate Pro- fessor in Accounting and Ross Taplin is Lecturer in Mathematics and Statistics. The authors would like to thank Abdul Jaleel Abdul Razeed, Wee Lin Chong, Sumi- jati Kusumo and Raghu Menon for their assistance in the data gathering phase. The financial assistance of an Australian Research Council Grant and a Murdoch University Research Quantum grant is gratefully acknowledged.  Blackwell Publishers Ltd. 1999, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA.