This accelerated growth is a result of advancements in information technology. There are two different aspects of information technologies which have affected the global business scenario. These technologies have made micro management of businesses very easy and secondly they have totally revolutionized communication. Systems like SAP make it possible to micro manage organizational divisions from thousands of miles away using information technology communication tools. All multinationals have adopted these systems and through these systems have been able to expand all around the globe. Moreover organizations strive to compete in international markets and adapt to changing market needs. Thus to compete with international conglomerates, local organizations have to evolve themselves according to global systems. Similar to organizations other stakeholders of financial information are also becoming global; these include financial investors, financial analyst, auditors etc. Global financial houses such as Goldman Sachs etc. have presence all around the global. Similarly companies such as Deloittes, KPMG, PWC and Ernest & Young are present in almost all countries of the world. Direct users of financial information o i.e. shareholders are also becoming more and more global. Most exchanges whether currency, stock or bond have online trading systems. These trading systems allow investors to invest anywhere around the globe. The financial troubles of the US and European economy are another factor encouraging investors to adopt global investment options in emerging markets such as China, Brazil etc. The financial crunch in the global capital markets is also forcing local regulatory bodies to adopt financial practices which would encourage more international investors to invest. The primary concern for international investors in regard to financial regulations, is the reliability of the financial information being provided. The recent financial crisis has raised many objections of financial reporting standards of financial bodies such as banks and investment houses. Therefore to attract more international investments, efforts are being made to make the local financial systems more stern and risk free. The ultimate aim of these efforts is to increase the understanding, comparability and reliability of financial information. The discussion shows that users of financial information require accounting standards which are global. As the organizations, shareholders, investors and analyst go global, the accounting standards all need to be global. The cost in translating financial statements from standard to the other is very high considering the current recession. Similarly the movement towards increased transparency requires standards which are more strict and provide greater amounts of objective information to shareholders. This is the very reasons that a global movement towards harmonization and globalization of Financial Reporting Standards has materialized. The International Financial Reporting Standards have become the global financial reporting standards and would totally overcome the Generally Accepted Accounting Principles (GAAP). The biggest advantage of IFRS thus has been the globalization of accounting standards by formulating standards which are efficient and effective in different cultural and operational environment. These standards are more transparent in their reporting requirement and encourage economic stability over a long period of time. International Financial Reporting Standards (IFRS) The IFRS are Financial Reporting Standards created by the International Accounting Standards Board. These standards
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