iTJAR EDITIORIAL POLICYACCOUNTING ENCOUNTERS OF THE TJAR KIND
Accounting theory has taken two distinct approaches: one supports understanding ofenvironment-specific local accounting institutions in various economies, while the othergeneralizes American and West European accounting institutions across the world. It is easy,
albeit costly, to overlook this co-existence of two kinds of theory in the rush to world-wide
convergence or integration of accounting. Consideration and comparison of the two may allow
us to carefully explore the foundations of the arguments for convergence. However, suchexploration requires accounting scholars to observe, examine, evaluate, and critique the proposedsystems and alternatives of which convergence itself is a salient element.
Encounters among cultures since the medieval times have created some commonalities but
have not yielded a universal culture. Whether economic encounters among disparate social
systems will yield, or even benefit from, a single system of accounting remains open. It is ourhope that The Japanese Accounting Review can serve as a forum for accounting scholars across theworld to observe, analyze, reflect, and report on encounters between the Western and othersystem of accounting. The obvious, but far too often neglected, recognition of this duality is acentral theme of TJAR. The TJAR website states:
This new English-language journal, The Japanese Accounting Review, aims topresent the world with quality research on diverse themes relating to accounting,thereby helping improve the economic welfare of societies around the world
through better accounting systems. We welcome submissions, which will be judged
solely on the basis of quality of their contributions, not on the status of thehypothesis, methodology, or the author.
Even the so-called capitalist societies differ in their stage of development, and may take very
different paths employing quite different institutions. If internationalization is interpreted toassume that all these societies and their paths converge, there is little evidence in support.
Accounting scholarship could focus on seeking a critical understanding of the current diversity,and evaluating alternatives for the future, without becoming a prematurely prescriptive
cheerleader for convergence. TJAR aims to help serve this function.
While the pages of TJAR are open to empirical examination of whether the theories
originating in the West are robust enough to afford us a better understanding of other economies,
they also welcome alternative theories, and their empirical scrutiny, that arise from institutions
specific to the other economies. The current controversy in Japan about the adoption of IFRS isa good example of a subject for such studies. Development of theories, and analyses of data
relevant to cross-economy encounters are important goals of TJAR.
December, 2013

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TJAR EDITORIAL NOTE
The number of papers submitted to TJAR continues to increase, from authors all over theworld. Choosing which articles to include in our third volume was a difficult editorial task, andafter much work, we are pleased to present four articles. One work evaluates the International
Financial Reporting Standards (IFRS), two papers are in the field of experimental accounting,and another paper treats a historical theme. The papers cover a variety of topics, expanding on
our two previous volumes that focused largely on archival research. As editor-in-chief, I believethat the present volume is in the spirit of TJAR.
Professor Brown is a pioneer in securities market accounting and has been active in the field
for more than 40 years. In his current paper, he reviews the literature concerning the IFRS andreaches a positive view toward these standards. However, he recommends that accounting
researchers also consider research that presents negative views of the IFRS and supplementaryresearch to cover other important yet neglected areas. He also stresses that general IFRS studies
have peaked and that future IFRS studies should focus on specific accounting standards. The
previous TJAR volumes included papers that presented negative aspects of IFRS. I urge readers
to refer to those papers.
The present volume also includes two papers on experimental accounting. In the first ofthese papers, Bensimhon and Biondi report the results of two laboratory experiments concerning
security markets. In one type of experiment, the investors (subjects) received exogenous
accounting information about ultimate earnings not linked to the ongoing clearing price of asecurity. As a result, the prices of laboratory security markets converged to the fundamental
levels. On the other hand, in sessions in which the investors (subjects) received endogenous
accounting information linked to the ongoing clearing price of the security, prices of laboratory
security markets did not converge to the fundamental levels. In the latter case, security markets
sometimes encountered a bubble phenomenon. The authors conclude that selecting forward
induction or backward induction is important in forming expectations regarding the future price.
Forward induction causes loss of the earnings anchor, leading to a bubble.
Next, in a historical study, Noguchi and Boyns analyze the financial positions of the South
Manchuria Railway Company from its establishment in 1906 to the 1930s. In its early stage,
management of the South Manchuria Railway Company was not subject to interference.
However, in the 1930s, the company was influenced by the military in Guangdong and the birthof Manchukuo. Under this situation, the private corporation was pulled in different directions by
national policy interests and by stakeholder interests. The authors present a detailed analysis of
how the corporation’s financial policies and accounting practices changed. They conclude that
the South Manchuria Railway Company adjusted to meet the interests of a variety of interested
parties without succumbing to their requests. The company also covered its necessary funding
requirements.
Finally, in the second experimental study, Taguchi, Ueeda, Miwa, and Mizutani used a 3×3
coordination game to investigate whether the accounting system worldwide will converge to theIFRS. The results indicate that the presence of an egoistic nation can halt convergence. TJAR
has published a number of papers regarding the IFRS in past volumes. The present work is avaluable addition to this literature, providing insight from an experimental approach.

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Change in membership
Professor Y. Biondi has joined the Advisory Board.

December, 2013

HIDETOSHI YAMAJI
The Japanese Accounting Review, Editor in chief