Harmonization of International Accounting Standards

origin\n\nAs there has been a tremendous growth in the market place with the exist story practices, this leads us to read/write head why do we indigence harmonization of Inter issue account standards, what are its advantages and what are the barriers that impede harmonization? Although accounting whitethorn be the language of business, a common language has neer been inevitable -- at least as long as the dry land economy consisted of a set of more(prenominal) or less distinct depicted object economies.\n\n(Mednick 1991) (Cited in: www.wetherhead.cwru.edu) This, however, is no nightlong true. We now construct a world(prenominal) economy and it has unnatural the entire business world. For instance, todays global corporation may pose more than one headquarters, and its doing and distribution facilities are in all probability scattered throughout the world. good prices, interest rates and silver exchange values have become internationally associate -- with the result that governments around the world are increasingly keep harmonization of accounting practices and national policies. (Walters) (Cited in: Bisgay and Jayson 1989) Harmonization is necessary because standard national pecuniary statements are virtually uneffective; financial markets in more regulated countries are imperil with a loss of market share; and multinational corporations mustiness prepare multiple reports for various nations they do business in. (Nobes and Parker 1991) (Cited in: http://ecocomm.anu.edu.au) There is a ingest for harmonization for accounting standards in order to help the unconnected investor to understand the financial statements of the unconnected companies whos shares they might requisite to buy.(Iqbal, Melcher and Elmallah 1997) monetary in strivingation is a category of a language. And if the language of financial information is to be attribute to use, so that investment and doctrine decisions can more quickly be taken, it should not and be intelligible, it should also be comparable.\n\n(Belkaoui 1994) These new environsal factors of the global economy, the international monetary system, the multinational Corporation and foreign read investment create an environment in which business transactions, their conduct, criterion and disclosure, takes new and distinctive form that call for a ad hoc accounting sub even up or the harmonization of accounting practices.\n\nAdvantages of Harmonization\n\n(Turner 1983) The greatest arrive at that would flow from harmonization would be the comparability of international financial information. Such comparability would bring off the current misunderstandings about the reliability of foreign financial statements and would reassign one of the most strategic impediments to the flow of international investment. (Choi, frosting and Meek 1999) Harmonization would...If you want to get a right essay, order it on our website:

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