Firstly, IFRS ignores the political and economic factors, which are the things constructing the actual financial reporting. In different countries, the implementation of IFRS is uneven. This is strongly influenced by the power of local government and economics.Therefore, the differences in financial reporting is inevitable. And this differences has been hidden under the rug of ostensibly uniform accounting standards. To explain this more, the uneven of implementation is partly caused by the difference in monitoring system, in the extent that the government involving in the economy and the legal system. Since these political and economic factors remain local rather than global, the process of producing financial reporting tends to care firstly about domestic market instead of global market. This means that if reports under IFRS conflicts with the benefits of the domestic markets or even the nation, then the political force will give the pressure to change parts of IFRS in that nation. For example, ‘the European version of IAS 39 emerged in response to considerable political pressure from the government of France, which responded to pressure from domestic banks concerned about balance sheet volatility.’ (Ball …show more content…
However, the usefulness of IFRS is limited by outside factors, which are the political and economic forces. These factors leads to a result that the financial reporting depends more on local rather than a global environment, when the benefits of nation is effected by IFRS in a unacceptable way, then financial reporting tends not to follow IFRS or force IFRS to be changed to a unique version for the nation. Financial reporting is impossible to be uniform if implementation is uneven among different countries. Also, the different methods used during the process of producing financial reporting directly effect the uniformity of reports because the figures cannot be compared. Translation loss will cause differences in financial reporting because IFRS adopted is not even ‘uniform’. There are more evidence demonstrating that IFRS does not lead to uniform financial reporting. Therefore, using IFRS as a counterexample, I believe that uniform accounting standards will not produce uniform financial reporting in