According to google.com (web definitions) Accounting Standards can be defined as a set of rules governing how accounts are drawn up. Would there be more positive effects than negative if a country develops its own accounting standards? I totally disagree with this statement, instead should be read, ‘A country should ‘NOT’ develop its own accounting standards’. To support my statement I will substantiate on five points stating why there is one accounting standards for everyone to follow; these include: 1. To foster easy comparison- it makes it possible to compare information about different companies in the same industry, without worrying about where the country is located. It helps to promote free circulation within the markets. However this body of global regulations must be allowed for the recognition of certain local realities. If each country should develop its own accounting standards then there will be difficulty in comparison.
2. For harmonization- This "harmonization" of accounting standards will help the world economy in the following ways: by facilitating international transactions and minimizing exchange costs by providing increasingly "perfect" information; by standardizing information to world-wide economic policy-makers; by improving financial markets information; and by improving government accountability. International investment decisions and financial-based management decisions are then made with less risk.
3. Easy verification for external auditors- some external auditors before accomplishing this position may have studied in another country and then return to their home country to further in their profession. Having known all the accounting Standards operation of the country that they had studied in; it would be irrelevant for the home country to operate on different accounting standards and if they do then job opportunities cannot be globalised in the accounting field.
4. It allows transparency, confidence, control...
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