Harmonization of International Accounting Standards

Introduction\n\nAs there has been a tremendous reaping in the market stance with the existing history practices, this leads us to question why do we need harmonisation of immaterial news report standards, what argon its advantages and what ar the barriers that hinder harmonisation? Although chronicle may be the terminology of personal line of credit, a common verbiage has never been necessary -- at least as longsighted as the world saving consisted of a set of to a greater extent or less pellucid case economies.\n\n(Mednick 1991) (Cited in: www.wetherhead.cwru.edu) This, however, is no longer true. We now possess a global economy and it has affected the entire trade organisation world. For instance, todays global corporation may have much than wiz headquarters, and its production and distribution facilities are probably scattered throughout the world. Commodity prices, interest evaluate and currency exchange determine have become world-widely linked -- with the result that governments somewhat the world are more and more supporting harmonization of accounting practices and national policies. (Walters) (Cited in: Bisgay and Jayson 1989) harmonisation is necessary because standard national fiscal statements are or so useless; monetary markets in more regulated countries are threatened with a breathing out of market share; and transnational corporations must prepare quaternary reports for different nations they do business in. (Nobes and Parker 1991) (Cited in: http://ecocomm.anu.edu.au) There is a need for harmonization for accounting standards in order to supporter the foreign investor to understand the financial statements of the foreign companies whos shares they might hope to buy.(Iqbal, Melcher and Elmallah 1997) Financial information is a form of a lyric poem. And if the language of financial information is to be put to use, so that investment funds and credit decisions can more readily be taken, it should non only be i ntelligible, it should overly be comparable.\n\n(Belkaoui 1994) These new environmental factors of the global economy, the global fiscal system, the Multinational Corporation and foreign direct investment effect an environment in which business transactions, their conduct, measurement and disclosure, takes new and characteristic form that call for a specific accounting hoagy discipline or the harmonization of accounting practices.\n\nAdvantages of harmonization\n\n(Turner 1983) The great benefit that would flow from harmonization would be the equivalence of international financial information. Such comparability would eliminate the current misunderstandings about the reliability of foreign financial statements and would remove one of the intimately important impediments to the flow of international investment. (Choi, Frost and Meek 1999) Harmonization would...If you want to get a full essay, order it on our website:

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