Uniform Accounting Standards
‘Uniform Accounting Standards Produce Uniform Financial Reporting’
Inro
Why is the question important?
In an increasingly interconnected world, the operations of international corporations are transnational. In addition, more and more investing takes place on a global level. Historically, different countries have developed their own national accounting standards. Before the introduction of the IFRS, the accounting principles of neighbouring countries were similar in many respects but used different financial reporting standards. Numerous accounting standards can lead to confusion and large complications for preparers and users of financial statements. Financial statements prepared under different countries’ financial accounting rules are often …show more content…
In practice, there are potential problems with the determination of fair value. In some cases, if active liquid markets are not available, companies must estimate the fair value. This increases opportunities for manipulation and may introduce some ‘noise’ due to imperfect estimation of variables or imperfect or inadequate use of valuation models. Moreover, the fair value measurement approach adopted by IAS 39 differs from the accounting treatments used in Europe under previous local accounting …show more content…
The incentives of preparers (managers) and enforcers (auditors, courts, regulators, politicians) remain primarily local, and inevitably will create differences in financial reporting quality that will tend to be ‘swept under the rug’ of uniformity
References:
Todd M. Hines. (2007). International Financial Reporting Standards: A Guide to Sources for International Accounting Standards. . 1 (1), 4-5
Christopher Nobes. (2011). International Variations in IFRS Adoption and Practice. . 1 (1), 21-22.
Ana Isabel Morais & Ana Fialho. (2008). Do Harmonised Accounting Standards Lead to Harmonised Accounting Practices? An Empirical Study of IAS 39 Measurement Requirements in Some European Union Countries. . 1 (1), 5-8.
Susanne Fritz and Christina Lämmle. (2003). The International Harmonisation Process of Accounting Standards . . 1 (1), 12-19.
Ray Ball. (2006). International Financial Reporting Standards (IFRS): pros and cons for investors. . 1 (1), 12-25.
Inro
Why is the question important?
In an increasingly interconnected world, the operations of international corporations are transnational. In addition, more and more investing takes place on a global level. Historically, different countries have developed their own national accounting standards. Before the introduction of the IFRS, the accounting principles of neighbouring countries were similar in many respects but used different financial reporting standards. Numerous accounting standards can lead to confusion and large complications for preparers and users of financial statements. Financial statements prepared under different countries’ financial accounting rules are often …show more content…
In practice, there are potential problems with the determination of fair value. In some cases, if active liquid markets are not available, companies must estimate the fair value. This increases opportunities for manipulation and may introduce some ‘noise’ due to imperfect estimation of variables or imperfect or inadequate use of valuation models. Moreover, the fair value measurement approach adopted by IAS 39 differs from the accounting treatments used in Europe under previous local accounting …show more content…
The incentives of preparers (managers) and enforcers (auditors, courts, regulators, politicians) remain primarily local, and inevitably will create differences in financial reporting quality that will tend to be ‘swept under the rug’ of uniformity
References:
Todd M. Hines. (2007). International Financial Reporting Standards: A Guide to Sources for International Accounting Standards. . 1 (1), 4-5
Christopher Nobes. (2011). International Variations in IFRS Adoption and Practice. . 1 (1), 21-22.
Ana Isabel Morais & Ana Fialho. (2008). Do Harmonised Accounting Standards Lead to Harmonised Accounting Practices? An Empirical Study of IAS 39 Measurement Requirements in Some European Union Countries. . 1 (1), 5-8.
Susanne Fritz and Christina Lämmle. (2003). The International Harmonisation Process of Accounting Standards . . 1 (1), 12-19.
Ray Ball. (2006). International Financial Reporting Standards (IFRS): pros and cons for investors. . 1 (1), 12-25.