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Accounting Theory -Harmonization of Standards

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Accounting Theory -Harmonization of Standards
Harmonization of International Accounting Standards

Contents

A. Introduction & Objective.……………………………………………………………….3

B. Why Harmonization of international accounting standards required……………..4

C. Factors influencing any Country’s Accounting Standards…………………………..6

D. Role of International Accounting Standard Board (IASB)……………….…………..8

E. Moving towards Harmonized International Accounting Standard………………….9

F. Obstacles and Benefits of the harmonization of International Accounting………..10

G. Conclusion………………………………………………………………………12

H. Recommendation……………………………………………………………….13

I. Research Reference………………………………………………………………………....14

A. Introduction & Objective

Objective of this research paper is to discuss the topics that can influence any country’s Accounting Standards. The need for harmonization of international accounting standard will be covered as part of this discussion. As there has been a tremendous growth in the market place with the existing accounting practices, this leads us to question why do we need harmonization of International accounting standards, what are its advantages and what are the barriers that hinder harmonization? Although accounting may be the "language of business," a common language has never been necessary -- at least as long as the world economy consisted of a set of more or less distinct national economies.

B. Why Harmonization of international accounting standards required

The greatest benefit that would flow from harmonization would be the comparability of international financial information. Such comparability would eliminate the current misunderstandings about the reliability of foreign financial statements and would remove one of the most important impediments to the flow of international investment. Harmonization would save time and money that is currently spent to consolidate divergent financial information when more than one set of reports is required to comply


Cited: in: Berton 2000) is not just optimistic about world harmonization, he is sure that all countries will move to IASB or the international accounting standards. Despite what Sir Bryan Carsberg believes, in the current situation it is very difficult to judge the future of international accounting standards but one can say that slowly but steadily countries are moving to the harmonization of international accounting standards.
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