The comparability of European IFRS financial statements. Problem areas according to auditors, analysts and other users.

The implementation of the International Financial Reporting Standards (IFRS) in the European Union in 2005 has had important consequences for the presentation and the content of the consolidated financial statements of listed, or publicly traded European companies. It is the first time in history that all European listed companies apply the same standards. This offers some unique research opportunities. One might for example assume that the European IFRS financial statements are now comparable. Reaching higher comparability was one of the main goals of the European commission, in order to contribute to a better functioning of the internal market. Studies already showed, however, that differences in the application of the IFRS standards still exist due to for example open and covert options or due to different interpretations resulting from different cultural backgrounds (for example Nobes (2006)). These differences in application can have a negative impact on the comparability of the financial statements. Users of European IFRS financial statements might therefore wrongfully assume that these financial statements are comparable. This can have an adverse impact on their economic decisions. There is thus a need for research on how comparable the consolidated financial statements of the European listed companies truly are. This study contributes by determining what the problem areas of the European IFRS financial statements are when it comes to comparability according to the auditors, analysts and other users of these financial statements. Auditors are important for their professional judgement while analysts represent a large group of professional users. The other users like investors, employees and consultants, represent the average professional and private users.