¶ … accounting standards in use throughout the world in the next 5 years? The need for a universal set of accounting standards was recognized years ago, the origins of which can traced back to early twentieth century where practitioners in the U.S. And elsewhere failed to implement uniform accounting principles. The call for uniformity went stronger when the U.S. stock market crashed in 1929. It was firmly believed by then that there should be uniform accounting standards which would limit the use of professional judgments made by the management and hence will enhance the comparability of the financial statements (Previts and Merino, 1998, pp. 161 et seq.). Subsequently, when the world's leading financial countries faced cases like Enron and others, the need for consistent and comparable financial reporting became paramount. The need become more evident with dramatic increase of cross-border transactions, multinational corporations, foreign direct investments comparable as well as increase in the number of foreign securities listings on the stock...
Until recently the world economy was divided between the two world's most prevailing accounting regimes i.e. The IFRS and the U.S. GAAP. However, to improve the credibility as well as the comparability of financial reports harmonizing the standards is inevitable. This is why moving the world towards a planned reformation of these standards in order to eliminate the inconsistencies between the perspective regimes. The International Financial Reporting Standards are laid out by the International Accounting Standard Board, an independent body set up in the year 2001. Over time the IFRS has gained vast acceptance for statutory and tax reporting purposes around the world. Such as the European Union (EU) now requires all companies that are listed on the stock exchanges to follow IFRS standards and organize their financial statements in conformity to the International Financial Reporting Standards (IFRS). World's leading economies like the UK, Germany, and Japan are also netting under the frame work of IFRS. This makes it almost necessary for the U.S.…
Accounting standards and IFRS adoption in Cambodia and Thailand The significance of accounting standards Accounting may be considered as a business language through which the statistical results can be acquired which help in analyzing how well the firm is functioning. They give out timely statements of these statistics and help the stakeholders get all the information they need. Accounting is like a separate language which has its own grammar and these outlines
This is important, because it shows how there is the potential for both harmonization and division. Yet, once you look at what is taking place around the world, it is obvious that a common set of ideas are being readily accepted in different countries around the world. A good example of this can be seen by looking no further than China, where they announced that the country would follow IFRS
" (Camfferman & Zeff, 2) Indeed, the purpose which seems to stand above many others as specific Standards are examined is the improvement of financial reports as informative documents inbuilt with the capacity to educate users as to the financial disposition and outlook of reporting entities. The declared purpose of the IFRS is to improve the comparability, clarity, relevance and reliability of accounting processes and the resultant financial reporting across a
Value of Accounting Standards Accounting rules are designed to serve the capital markets and make these markets work efficiently. Accounting rules are essential to the efficient functioning of the economy because decisions about the allocation of resources rely heavily on credible, concise, transparent and understandable financial information. Without standard measures of the worth of a company, lenders and investors would have no way in which to evaluate the worth of
IASB The International Accounting Standards Board (IASB) currently has three types of active projects on their agenda. These include an agenda consultation project, financial crisis related projects, and memorandum of understanding projects. The following is a summary of these current active projects, their timetables established for the achievement of milestones, as well as the conceptual frameworks involved in the projects. The first type of project currently active on the agenda of the
Accounting forms the overall backbone of the financial world. Financial markets are predicated on consumer and user confidence. Without confidence, consumers attempting to make financial decisions will be doing so using inaccurate and incomplete information. The lack of transparency regarding the truthfulness of reported numbers creates uncertainty within the capital markets. This uncertainty regarding the accuracy of information ultimately undermines the overall financial system, causing harm to society in the
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