In order to approach this topic for discussion, we should first clarify the meaning of key terms introduced in the thesis and examples of the levels at which they exist. Financial reporting standards are defined most cleanly as a set of guidelines and rules for conveying formal records of financial activities of an entity, capable of being applied consistently across the level at which they are designed. This can be locally, within a small or independent economy, or globally, as is the case with the IFRS and US GAAP, both of which have a wide range of users, both governments and firms pursuing the respective benefits which come from following a fixed set of accounting standards. Uniformity in financial reporting would involve every reporting
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Ramanna and Sletten (2009) explain the benefits of IFRS adoption as a means of as both economic and politically based, lowering the costs to reporting entities and users, making financial information more reliable and useful on an international scale, a summary reinforced by the IFRS’s own mission statement (IFRS 2016). Thus, there is evidence that financial reporting standards are believed to bring about uniform financial reporting, however it is the interference of other factors which we will see hinders this …show more content…
The diverse nature of economies using the IFRS creates difficulty in the standards setting process, as different forms of capitalism persist between countries which have adopted the IFRS (Walker 2010). Walker’s research leads him to the conclusion that one set of standards is too few to properly establish strong accounting practice in each country; he suggests more than one set of accounting standards per each form of capitalism to allow for better fitting standards, as opposed to the mandatory adoption of one set. Mandatory compliance of IFRS has been achieved in countries which don’t exactly mirror the build of Anglo-American capitalism such as Jamaica, in an effort to bring about confidence in the financial information provided by Jamaican firms and improve trade (Conference, Trade and Uninted Nations Conference on Trade, 2009). Besides the obstacles discussed earlier, such as limited understanding of the IFRS at a reporting level, the only major issue Jamaica encountered was that it’s small and medium enterprises (SME’s) struggled to meet the standards. It can be argued that this is an indication that IFRS does not exactly fit Jamaica’s economy or the smaller businesses present. Zeff and Nobes (2010) put forward their interpretation of an adapted version of IFRS, to avoid negatively impacting parts of the country which
Ramanna and Sletten (2009) explain the benefits of IFRS adoption as a means of as both economic and politically based, lowering the costs to reporting entities and users, making financial information more reliable and useful on an international scale, a summary reinforced by the IFRS’s own mission statement (IFRS 2016). Thus, there is evidence that financial reporting standards are believed to bring about uniform financial reporting, however it is the interference of other factors which we will see hinders this …show more content…
The diverse nature of economies using the IFRS creates difficulty in the standards setting process, as different forms of capitalism persist between countries which have adopted the IFRS (Walker 2010). Walker’s research leads him to the conclusion that one set of standards is too few to properly establish strong accounting practice in each country; he suggests more than one set of accounting standards per each form of capitalism to allow for better fitting standards, as opposed to the mandatory adoption of one set. Mandatory compliance of IFRS has been achieved in countries which don’t exactly mirror the build of Anglo-American capitalism such as Jamaica, in an effort to bring about confidence in the financial information provided by Jamaican firms and improve trade (Conference, Trade and Uninted Nations Conference on Trade, 2009). Besides the obstacles discussed earlier, such as limited understanding of the IFRS at a reporting level, the only major issue Jamaica encountered was that it’s small and medium enterprises (SME’s) struggled to meet the standards. It can be argued that this is an indication that IFRS does not exactly fit Jamaica’s economy or the smaller businesses present. Zeff and Nobes (2010) put forward their interpretation of an adapted version of IFRS, to avoid negatively impacting parts of the country which