Impact of Using IFRS on Creating an Effective Marketing Strategy
Purposes: To determine the implementation level of the IFRS for the firms which operate in the Federation of Bosnia and Herzegovina and to analyze the effect of using this recent financial reporting system on process of creating marketing strategy.
To provide contextual understanding of the role of the new accounting standards and to reveal the problems which companies may face during the first implementation process of IFRS also measuring the effects of those problems on creating marketing strategy process.
To investigate the current situation of the IFRS in Bosnia and effect of this current situation to define marketing strategy process through the decision making for companies to contribute subsequent studies by analyzing the survey results and suggesting solutions for the difficulties which companies face when adopting the new standards .
Originality: The standards were translated and approved starting from 1998 to 2000 by the Federation of Bosnia and Herzegovina and implementation of new institutional frameworks for accounting in BiH started on January 1, 2005, through the application of the new Law on Accounting for the entire territory of BiH went into effect on January1, 2006.In this starting period in Bosnia, the Agency for Accounting and Audits revealed the factors that have had negative effects on the implementation of the international standards such as, lack of documents, fraud and errors, and weakness of internal control which are problem also for corporate governance. There are not enough study in the literature in Bosnia and Herzegovina related to the IFRS the biggest contribution of the study is filling that gap also this study provides policy makers with valuable information by showing them the real situation and perception of companies regarding the IFRS and effect of using IFRS on decision making process of defining marketing strategy. Also this study provides researchers to look at the companies s marketing strategy from a different perspective in terms of decision making.
Research Design and Methodology: The study will be designed to measure how effective of using IFRS on defining marketing strategythat includes decision making process of managers also to reveal the problem related to the adaptation process to the IFRS in Bosnia.Type of the research is survey study. The statistical package for social sciences (SPSS) will be used to analyze the results that will be obtained from the in depth questionnaire method also the structure of this questionnaires is descriptive through factor analysis.
Population and Sampling Population includes the all companies which are named as supermarkets in Federation of Bosnia and Herzegovina, but the supermarkets that will be selected from Sarajevo are sample for this study. The list of the companies with their detailed contact information is taken by using internet. The companies that are in the list are grouped according to their industries, numbers, ages, and sizes.
Keywords: Implementation Level of IFRS, Corporate Governance, Contextual Understanding
Introduction
Accounting is the system which aims to reflect companies‘fiscal situations transparently as well as their real situations. The International Financial Reporting Standards compose a principle based financial reporting system which gives the opportunity to use the same reporting language worldwide.
The International Financial Reporting Standards (IFRS) are a set of principles that arose from the need to increase the financial credibility and accountability of companies‘financial statements and which are recognized by the International Accounting Standards Board (IASB) throughout the globalized world.
In this study it is mentioned that the implementation of financial reporting and determination of marketing strategy of a company which helps companies to get their strongest place in the market.
Literature Review
The financial reporting language was created by people who found themselves needing or interested in having only one financial reporting language for the entire world in order to overcome the difficulties that arose from different situations. Every passing day the studies continue with the contributions and participation of other countries that are planning to adapt to this common financial language. The growing communication needs of companies reveal the necessity of common financial reporting standards for business life in a global world.
Otherwise, firms would face the difficulties which are the consequences of different reporting languages used by firms in financial reporting. Also, some unexpected situations may appear during the communication process between the companies. Additionally, the costs and workload of the firms increase along with the difficulties that companies face. This systematic reporting is called the International Financial Reporting Language and the aim is for it to be put into use worldwide.The level of the implementation process of the IFRS and the perception of companies regarding the IFRS in Bosnia and Herzegovina are examined in this study. A further aim is to reveal the problems faced by companies during the implementation process of the IFRS and to suggest solutions to these problems by appealing to policy makers to increase their level of awareness.
Creating marketing strategy process of managers is related to the structure and the management of the companies. Considering,creating marketing strategy process is strong in a company that will bring the success and high performance for the corporate.Additionally, it is important to use the right financial reporting to make defining marketing strategy process strength. The point is here determining effective marketing strategy decision making. Right financial reporting means trustable financial information it has effect on management in their decision making process to reach right marketing strategy.It becomes your responsibility to cultivate your designated market, if you decide to market your invention yourself (file:///C:/Users/Elif%20%C3%96zt%C3%BCrk/Desktop/Making%20an%20Effective%20Marketing%20Plan.htm)
After the communism process Bosnia and Herzegovina s economy can be viewed as a transition economy. Keller (1986) looked at relationship between the timeliness of financial reporting and the presence of a qualified audit opinion (Mc Gee, 2010).Also other studies focusing on the timeliness of financial reporting included an overview of the subject (McGee,2008).
In this study, the aim is determine how IFRS looks for marketing strategy in terms of decision making. In other words, how effective of using IFRS on decision making process of managers in FBIH. In detailed, this study observes the effect of using IFRS on decision making by analyzing the perception of companies regarding to the IFRS. It should be noted that the literature about financial reporting should contain more studies. There must be a call for resources to fill this gap by investigating the topic so that authors can provide the country with helpful information for its financial development process. With this study, the necessity of this system will become clearer.
To summarize, it is important to have marketing strategy for the companies. It has positive impact on also decision making process. It helps marketing managers to determine the proper strategy which has trustable financial sources.
Methodology
The objective of this study is to determine how effective of using IFRS on decision making process of managers in terms of determining marketing strategy. This will be done through analyzing the results of a survey carried out in the Federation of Bosnia and Herzegovina. Even though the researchers have addressed the subject from different perspectives in the preceding literature, the common view states that the recent reporting system increases the quality and reliability of financial reporting and it can be stated that the IFRS has positive impact on decision making process of managers, because the right financial reporting means having a strong and good marketing strategy for the firms. It is also important to use the common language in financial reporting in terms of decision making. Good defined marketing strategy means capability of decision making which has impact on companies s external performance as well as internal.
In addition to these methods, the method most commonly encountered in previous studies is the in-depth questionnaire method. There are obvious advantages involved in using questionnaires (Canibano and Mora, 2000).One of the advantages in depth research method is that the interviewees can ask the researchers questions and discuss unclear points with them ,thereby gaining a better understanding of the survey. What is more the method reveals the situation and provides information for determining the effectiveness of using IFRS on decision making process. For this reason the process of gathering data is handled seriously and all data is analyzed based on the scientific nationwide survey method.
The survey questions are structured according to what information is needed to contribute the literature and to supply companies with the results.
Expected Limitations
This study can be explained by using the numbers that were obtained by using factor analysis. The reasons for the initial limitation are related to incorrect information about the companies as some of them had changed addresses and others had changed names. For these reasons, these companies would be inaccessible.
Conclusion
In conclusion, it can be stated that the importance of having a right marketing strategy decision making for companies in terms of financial reporting is examined.There should be more studies like this paper to contribute the determining the effects of using IFRS on defining marketing strategy.
Also, there should be studies in the literature to show how to follow a path during the decision making process to determine the marketing strategy. By this way, it will be possible to fill the gaps in literature.
The findings of the paper should call the users and practitioners also the researchers understanding the requirements in determining effective marketing strategy in terms of financial reporting.
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