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MGT 4045 / 6045
ARTICLE WRITE-UP #8 – TAB K READINGS (IFRS & CONVERGENCE)
WRITE-UP DUE: Thursday, 10/28/10

1. Explain the rationale for the global harmonization of financial reporting and disclosure requirements. -Make the financial statement more comparable across the global market so investors can invest their capital in more efficient comparable.

2. Identify two groups that are exerting pressure for pursuing global harmonization. How do these two groups stand to benefit from harmonization? -Investors are concerned with the reliability and comparability of sinacial statement in countries other than theirs. They favor this because it will help lower cost of investing in countries aboard and enhance the effectiveness of investment decisions. Multinational companies want global harmonization because of the increase in international diversity of manufacturing and sales. The fact that all accounting practices are not compatible means that they devote more resources to prepare and consolidate there financial statements. 3. What are the main obstacles to global accounting harmonization? In your opinion, are these obstacles likely to be overcome in the near future? -The main obstacles are due to economics and politics. I think it will be a very slow and hard process to invoke in the near future because of everyone sensitivity and pride of there own countries. The polices would have to come from a super national organization and combine principals of many different countries. 4. What is the role of each of the following supra-national organizations? a. International Accounting Standards Board (IASB)

-Developed as a parent entity of the IASB, it is an independent standards setter that assumes accounting standards setting responsibilities from IASC. b. International Federation of Accountants (IFAC)

-Organizational accounting organization that represents accountants employed in public practices, and the primary...
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