The Impact Of Economic Globalization On The Quality Of Accounting Information

831 Words Jun 17th, 2016 4 Pages
1. Introduction
Economic globalization has resulted in a global economic integration process. Following the development trends of economic globalization, economic communication is becoming more and more frequent. The language of accounting such as financial report used by international society generally, plays an important role in the process of economic globalization. At the same time the people involved are having a higher demand for it. Bushman (2003) argues the quality of the accounting information, especially the reliability and comparability often directly determine the quality and consequences of market transactions. Also the quality of the accounting information affects the efficient allocation of global resources. However, accounting standards play a decisive role in the quality of accounting information. There are different degrees of differences between countries. To strengthen the comparability and convergence of the accounting information, it is necessary to reduce the differences in accounting standards between countries. The connection between capital markets is becoming much closer, investors and companies are looking for the opportunities to transnational trading. (Saudagaran 1997) Therefore, the international convergence of accounting standards has become an inevitable issue when construction of national accounting standards. International Accounting Standards Board was established in 2001. According to IASB, the International Accounting Standards Board…

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