For the layperson who is likely to be invested in a stock, a company or a mutual fund, this does reflect a core obstacle to effective decision-making. Indeed, as with many aspects of globalization, the implications of international accounting standards as a concept would only arrive at many of its conflicting points after a period of unencumbered idealism. Again, as the more general discussion on globalization denotes, the implications of a multinational framework for commercial exchange had long been done with a pronunciation of interests to the benefit of the world public. Namely, the assistance which could be provided through the opening of trade barriers in a general sense to the developing sphere, for one instance of commonality, might be seen at the base of the philosophical impetus for both the process of globalization and the symbiotic drive to create universal standards for financial reporting. At this time, it faces its primary resistance in many locales from domestic accountancy bodies which defer to their own domestic standards, typically known as Generally Accepted Accounting Principles (GAAP). However, from the perspective held in many participating nations, the goals of a global capitalist market could be seen to affiliate directly with the success enjoyed by the international movement to set a universal frame for accounting and financial reporting. The International Financial Reporting Standards are designed to produce a unifying set of standards and procedures for accountancy professionals throughout the global community,...

Our understanding of the principles and premises of the IFRS and applicable terms of the IAS will be aided by a greater understanding of the financial reporting standards which are now coming to be regarded as universal
With some understanding of the difficulties imposed on clarity of reporting by the internationalization of the economy, it becomes clear that the difficulties already inherent to the financial reporting of mutual funds are considered in some light by the conditions of the IFRS. This provides a basis for the Cox endorsement, which holds consistent with the perspective of the United States government that the internationalization of financial reporting standards, though controversial for fear expressed by some that it might lead to hardship for developing nations without this precedent of reporting detail, will nonetheless ease the burden which has been too heavily placed on the investor. Cox, and this discussion, endorse the approach as pertinent to making improvements in the openness and clarity of financial reporting.

Works Cited:

Barrett, M.E. (1971). Accounting for Intercorporate Investments: A Behaviors Field Experiment. Journal of Accounting Research, 9, 50-65.

Cox, C. (2007). Mutual Fund Prospectus Simplification. U.S. Securities and Exchange Commission. Online at http://www.sec.gov/news/speech/2007/spch111507cc-2.htm