Essay on Harmonisation
There is significance between accounting harmonisation and accounting standardisation where harmonisation allows countries to have different accounting standards provided that they do not have logical conflict with the International Accounting Standards Board (IASB). Therefore the accounting standards in different countries are not identical but very similar from one to another which allows convergence of accounting practices. However, standardisation of accounting has the direct opposite meaning of harmonisation where the standardisation requires all accounting practices in various countries to be exactly the same. Harmonisation tends to be associated with IASB which carries out the process of coordination whereas …show more content…
Business performance between different countries can be compared in a simple and meaningful way if the accounting standards are being harmonized. Similar accounting standards can be applied easily if the company has a subsidiary overseas, and systematic review and performance evaluation can be performed easily in a more professional manner. Time spent will be less than if the standards differed significantly, and the cost of comparison will also be cheaper.
ECONOMIC AND FINANCIAL DEVELOPMENT
Countries that wish to incorporate an accounting standard in their own countries but do not have the intention of spending their resources to prepare their own accounting standard may as well adopt the international standards. The process of harmonising accounting standards also provides more opportunity to developed countries by joining the group. Developed countries can benefit by not only using the international standards, but also by having access to information about the international accounting requirements. This is paramount for them to achieve a better reputation in the eyes of other countries.
Harmonisation of accounting standards provides better opportunities for companies to gain access to international markets. The