The Expected Gains Of Global Accounting Standards Essay

1642 Words Nov 13th, 2016 7 Pages
The expected gains of global accounting standards are irresistible. As stated by Brown (2011), a high-quality accounting standards will endorse comparability and quality of financial reporting along with the integration of markets internationally and the expansion of national capital markets. For instance, International Accounting Standards Boards (IASB) has developed a single set of high quality and understandable accounting rules which is International Financial Reporting Standards (IFRS). Recently, the IFRS is an obligatory for all countries in European Union (EU) to achieve uniformity for consolidated financial statements of most European listed companies. This has been challenged by Sunder and Fearnley (2006) who state that “a uniform classification of transactions that occur in diverse environments is logically impossible”. Moreover, there is a vague interpretation of the uniformity in accounting reports in effect of global accounting standards. Sunder (1997) stresses the disorientation in uniformity since no two circumstance and transaction are identical in all aspects. Thus, does uniformity mean any two transactions with any dissimilarity must be treated contradictorily or any two transactions with any similarity must be treated identically. The answers of these questions lead to different clarification. Consequently, there is a well-known argument of Ball (2006) which proposed that uniformity in accounting standards will not yield uniformity in accounting reports.…

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