Got a tricky question? Receive an answer from students like you! Try us!

The Choice between Formulation of Accounting Framework and Adoption of International Financial Reporting Standards: A Case of Developing Countries - Essay Example

Only on StudentShare
Author : altaberge

Summary

Businesses and organizations have gained significant benefits with the increase in globalization all over the world. Among many benefits, one key advantage associated with globalization is that it has enabled business entities…

Extract of sample
The Choice between Formulation of Accounting Framework and Adoption of International Financial Reporting Standards: A Case of Developing Countries

With the adoption of accounting standards and frameworks, businesses are able to reduce their costs relating to financial reporting, particularly those countries where generally acceptable accounting principles are either nonexistent or are not effective enough to be relied upon or adopted. The adoption of international accounting frameworks not only benefits business entities adopting them but also benefits the users of financial statements prepared by those entities. As for instance, International Financial Reporting Standards, which is a renowned accounting framework, is being followed by a number of business entities operating in different parts of the world. By way of following similar accounting frameworks such entities are able to report their operations on similar patterns and analysts, investors and other stakeholders are able to comprehend them easily (Adekoye, 2011). The wider impact of adoption of internationally recognized financial reporting framework is that users of financial statements are more confident and certain about efficiency, effectiveness and reliability of the financial reporting process (Ahmed, 2011). On the other hand, implementing locally developed accounting standards can have its own distinct benefits for developing countries. ...
Download paper

Related Essays

Finance and Accounting Research Paper: The International Financial Reporting Standards
The International Financial Reporting Standards …
10 pages (2510 words)
Conceptual Framework: Financial Reporting
The Conceptual Framework for Financial Accounting Accounting is at the core of business finance, and with the dynamic developments of the global economics, this subject has also become a key area of research and analysis. In this situation, even the most basic accounting concepts like assets, liabilities, revenue, debt, etc. are of critical importance. Terms based on the accounting concepts need to be refined, and if necessary, redefined to suite the requirements of modern financial accounting. FASB has declared 7 pronouncements (6 of which are extant) termed as Statements of Financial…
4 pages (1004 words)
International Financial Reporting Standards (IFRS)
The policies of IFRS are more advanced and precise for meeting the changes in the new accounting and audit systems, so US is also moving towards IFRS. The US GAAP is actually concept based, whereas IFRS is based on principles. The methodology of these two frameworks and the accounting treatments are also different. In US GAAP, the research is mainly based on the literature but in case of IFRS, the rules are mainly based on reviews and patterns of facts. Table of Contents International Financial Reporting Standards (IFRS) 4 Generally Accepted Accounting Principles (GAAP) 5 Different between…
3 pages (753 words)
International Financial Reporting Standards
Adoption of International Financial Reporting Standards and efforts to converge United States GAAP and Global Standards will provide a framework for conformity of global financial reporting principles (Ernst & Young 15). The international financial reporting standards will enhance the comparability of corporations internationally. The new system will provide investors and shareholders with better monetary information of various organizations. The new system will assist investors to acquire dependable information of firms with international operations. Investors need firms’ details, which are…
International Financial Reporting Standards
The IASB is responsible for oversight of the IFRS. This agency was formed in 1973 under its former name International Accounting Standards (IAS). The IFRS were created in 2001 (Articlebase, 2008). The first nation to adopt the IFRS framework was the European Union. The countries of Europe adopted IFRS in 2005 (Moya, Perrramon, Constans, 2005). The biggest stock exchange in the European nation is the London Stock Exchange (LSE). All domestic companies must abide by IFRS and U.S. companies that want to list their stocks in the London Stock Exchange must convert their financial statements to…
4 pages (1004 words)
International Financing Reporting Standards
Although the US is yet to follow suit, there is a growing enthusiasm towards their adoption by the SEC. Such a move will concequently make it mandatory for the organizations to report using these standards. Currently, efforts are underway to implement the international financial reporting standards in the US accounting field. This is in appreciation of the importance of these standards in cushioning global firms in times of economic hardships. Adopting such standards will undoubtedly assist firms in reducing costs associated with financial reporting since the standards are globally acceptable.…
15 pages (3765 words)
The role of International Financial Reporting Standards
This facet consists of mathematical approach that most of managers do not have insight towards the norm and get scared of the mathematical issue. Other prevailing issue as per the management of numbers is that most of seniors as well as managers are busy that they do not have time give attention as far as the aspect of company data analysis and its interpretation is of more concern (Cunningham and Fiume 10-15). Many companies however, prefer to adapt the issue of numbers management for realizing their level of production. One of the companies that have adopted numbers management is the wall…
5 pages (1255 words)