Interpreting interpretations - An exploratory study of enforcement authorities' interpretation of IFRS

Sammanfattning: This thesis investigates the identified research gap concerning enforcement of IFRS, in the presence of potential interpretation differences. An exploratory, qualitative case study has been made to analyse one enforcement process in Sweden involving six authorities, forming their opinion on whether the company of interest had violated IAS 39 when valuing its trading portfolio. The analysis of the authorities' interpretations is made by using the theoretical perspective of epistemic communities together with findings from existing research concerning the transition to IFRS. In addition to the archival data, interview data has been gathered from the Swedish Economic Crime Authority to further problematise the enforcement pressure of IFRS put on individual jurisdictions. Our empirical findings conclude that various interpretations of IAS 39 exist and consequently we have identified three epistemic communities. We suggest that a possible reason for the interpretation dissimilarities is due to the communities' approach to validate knowledge, in this case how they rely on different expertise to form their opinion. We question this reliance on experts as it is, according to us, subjective and we find it problematic that the expertise of the authority that has the aim to promote harmonisation of IFRS in the EU has been neglected. Moreover, we analyse the difficulty of pursuing valuation cases from an enforcement perspective, which is supported by our empirical evidence where two enforcement authorities valued the same asset with a significant difference.