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¶ … Harmonization of Accounting and Disclosure Standards Around the World
An increasingly globalized world has naturally led to the current efforts to achieve harmonization of accounting and disclosure standards across the globe. The desirability of setting one universal standard for accounting and disclosure, it is theorized, will lead to several large potential benefits such as: large cost savings for organizations (especially global ones) from the use of one set of accounting standards through the company and for all purposes; generation of cost savings to businesses such as auditing and other professional advice services to business enterprises; improved efficiency in the working of capital markets; cost savings for investors as a result of increased convenience in carrying out investment analysis through high quality, transparent information on a comparable basis; gains to business operations from reductions in the cost of capital as a result of reduced uncertainties in the information available to the markets. Overall, it is also perceived that...
For one, accounting standards and style differ widely across the world, with differences getting accentuated even more between the developed and less developed countries and with varying cultural and political traditions, not to mention legal environments. Given the influence of culture and politics, harmonization of a common standard involves the collective political will of the world to adopt and enforce common standards. Secondly, there are several critical migration issues involved such as education and training that will involve huge amounts of initial expenditure. Third, there is the question of…
The Board of the International Accounting Standards Committee, December 2000, available at http://www.iasplus.com/resource/iascstmt.pdf;Internet; accessed 19 September 2003.
Portsmouth Business School, 2002, available from https://www.business.uiuc.edu/ciera/conferences/gottingen/Papers/Fearnley.pdf;Internet; Accessed September 20, 2003.
The Board of the International Accounting Standards Committee, December 2000, available at http://www.iasplus.com/resource/iascstmt.pdf;Internet; accessed 19 September 2003.
Accounting International Accounting and Auditing Standards International public sector accounting standards (IPSAS) are developed and put forth by the International Public Sector Accounting Standards Board of the International Federation of Accountants (IFAC). International private sector accounting standards are known as International Financial Reporting Standards (IFRS). They are put together and put forth by the International Accounting Standards Board (IASB), a self-governing standard generating body of the International Accounting Standards Committee Foundation. The
This is important, because it shows how there is the potential for both harmonization and division. Yet, once you look at what is taking place around the world, it is obvious that a common set of ideas are being readily accepted in different countries around the world. A good example of this can be seen by looking no further than China, where they announced that the country would follow IFRS
Value of Accounting Standards Accounting rules are designed to serve the capital markets and make these markets work efficiently. Accounting rules are essential to the efficient functioning of the economy because decisions about the allocation of resources rely heavily on credible, concise, transparent and understandable financial information. Without standard measures of the worth of a company, lenders and investors would have no way in which to evaluate the worth of
Credit Risk Management Banks are an important part of the economy of any nation. Traditionally, the banks operate as financial intermediaries serving to satisfy the demand of people in need of various forms of financing. Through this, banks enable people to purchase home and businesses to expand. These financial institutions therefore facilitate investment and spending that are responsible for fueling the growth of the economy. In spite of their vital role
Preparers, auditors, and users of financial statements must encourage and support compliance with the substance and form of the international standards; (3) the adoption and implementation of the international standards require action at both the national and international levels. At the national level, it is important that governments, regulators, and national standard setters place international convergence as a priority on their agendas. At the international level, it is important
Some mergers and acquisitions (M&as) did not generate any goodwill because they were accounted for using the pooling-of-interests method. In 1969, Leonard M. Savoie (then Executive Vice President of the AICPA) stated that he expected the then-prevailing accounting pronouncement authority, the Accounting Principles Board (APB), to abolish the pooling of interests method. However, the death-knell for this accounting method was not sounded until 2001 with the issuance of SEAS