In relation to this discussion, the integration of accounting practices followed by the company with that prevailing within the host country is also an important issue faced by the company in its global business practices. In order to address this issue, the phenomena of harmonization of different accounting standards and practices and emergence of a common set of accounting standards has come into lime light (Choi, Frost and Meek 1999). In this context, the paper aims to discuss the phenomena of harmonization and evolution of one common set of accounting standards in the most empirical manner. The paper intensively focuses upon financial and reporting standards and need of their harmonization. The paper also investigates the significance of different international bodies and organizations such as International Accounting Standard Board (IASB), International Federation of Accountants (IFAC), and Accounting standards Board (ASB) in the context of making the process of harmonization of reporting and accounting standards more smooth and effective (Deegan and Unerman 2011). Financial accounting and reporting standards and their needs Financial accounting can reporting standards can be considered as guidelines and direction provided by the apex regulator authorities of the country for the purpose of aligning accounting practices undertaken by individuals and business organization in maintaining their accounts and reporting the financial records in a fair manner. In relation to this, different accounting and reporting standards reflects some crucial accounting principles on the basis of which, an organization can undertake fair and effective accounting practices (Nobes 1999). As the span of and importance of business activities of different organization in an economy is quite vital, having integrity of accounting practices becomes quite essential phenomena. These standards are quite essential for the purpose of preventing misrepresentation of different account
Harmonization of Financial standards and reporting standards Introduction In existing period of time, practices undertaken by business organizations have become quite globalized. In order to address different problems of international business environment such as intensive competition and dynamic business conditions, business organizations are undertaking international business expansion strategy…
The essay discusses the challenges faced by International Accounting Standards Board in accomplishing its mission of introducing international financial reporting standards for general purpose financial statements. It further discusses about the key characteristics of International Accounting Standards Board’s framework.
In 1995, the Commission presented its report, entitled “Our Global Neighborhood” (Kelly, 2005). The report was a justification of global governance importance, it pointed to the fact that its development is a part of the evolution of people’s efforts aimed at organizing their life on the planet rationally, and this process will continue forever.
For a long time, accountants in various countries around the world have deemed it necessary to bridge the gap between different aspects of accounting; this can only be achieved through harmonization of the different accounting standards around the world. Despite this, there are still some variants of accounting practices that are very independent and strong, and therefore they act as obstacles to harmonization.
Such differences between accounting systems make it difficult to compare the relative worth of companies operating in different countries. The very credibility of financial statements becomes suspect as a result of similar transactions being accounted for differently in various parts of the world.
However, financial reporting in the United States is currently influenced by the International Financial Reporting Standards (IFRS). This reporting application is having an impact on business decisions. Over the past 2 year, there has been a tremendous change in the field of Financial and Accounting reporting.
There are substantial differences between the UK GAAP and the US GAAP, for example. There are also differences between the UK GAAP system and the International Accounting Standards (IAS) and the International Financial Reporting Standards to which thousands of companies, including many Irish companies, will convert within the next few years.
This Essay provides an adequate knowledge of International Accounting Standard (IAS) and General Accepted Accounting Principle (GAAP) and their comparison. Mainly we only emphasize on the 5 IAS and compare their similarities and differences with the GAAP.
Reinforcing the positive incentive is the realization that a capital market, which ignores the development of a global accounting system, may find itself with a unique set of accounting standards while the rest of the world relies on a common set of accounting standards.
International financial reporting standards (IFRS) refer to a set of international standards in accounting that determine how the reporting of certain transactions in the financial statements should be done (Godfrey & Chalmers 2007, p. 233). IFRS tends to be based on