Internationally, more than 100 countries have adopted International Financial Reporting Standards IFRS or IFRS equivalents, including all EU countries and major Asian countries such as Hong Kong and Singapore which have adopted IFRS almost in their entirety. (KPMG, 2006, pp.11) The adoption of IFRS in Australia through the Australian equivalents of International Financial Reporting Standards (AIFRS) since the beginning of 2005 has reflected how Australia is also part of global momentum for consistency and high quality of financial reporting. Since the formation of International Accounting Standards Committee (IASC) in 1973, we see how accounting standards has become an important issue and an on going public concern.
IASC was first founded in June 1973 in London and was later replaced by the International Accounting Standards Board (IASB) on April 1, 2001. International Accounting Standards (IAS) was first introduced in 1973 by IASC, until it was adopted by IASB in 2001 for further development, calling the new standards IFRS. At that time of formation, the board of IASC consists of Australia, Canada, France, Germany, Japan, Mexico, Netherlands, UK, Ireland and USA. The establishment of IASC was a result of an agreement by the accountancy bodies within those countries. In 1977 International Federation of Accountants (IFRC) was formed and was working closely with all the members within IASC. Their aim is to “produce guidance practicing accountants for practicing accountants and auditors. The main objective of the IFAC and IASC is the achievement of a harmonized – ultimately globalised – profession with the highest technical and ethical standards”. (Tsufuoki F, 2000) In 1981 both bodies agreed that IASC would have full control in setting international accounting standards as well as issuing documents in relations to international accounting matters. All members of IASC were also part of the IFRC members until IASC changed its Constitution during May 2000....
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