Contextual Framework: The Influence of Global Convergence on the Japanese Accounting System

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This study examined the main features of the Japanese accounting environment and discussed the main reasons why Japan has adopted a cautious convergence approach in contrast to other countries. The findings of this study provide evidence that it would be problematic to require the adoption of IFRS for all listed companies in Japan. The main reason for this is that the Japanese policymakers and standard-setting bodies follow two objectives: enhancing the international comparability of financial reporting and maintaining institutional complementarity between financial reporting and other infrastructures such as accounting-related laws. In other words, the main finding shows that the Japanese business and accounting systems have been formed by integrating the Anglo-American model with the traditional Japanese model to create a Japanese-specific style of convergence.