J MAdhikari and TondkarSaudagaran argue that following International Financial Reporing Standards IFRS would convey great benefits to society, such as comparison of statements between states, patterned advance and development of capital markets and communicating and relationships between transnational companies.
There are also some disadvantages linked with conceptual frameworks like development of conceptual framework is under the influence of the political power. Some developing countries are flexible and can adapt quickly, but they may face obstacles instituting changes.
It allows uncomplicated communication and transfers of finance personnel. It is about the consistency in actual application. Harmonisation means that deviating rules, which do not exclude themselves, can continue to exist next to each other.
This can be explained with the circumstances that similar transactions are accounted for and reported in the same manner everywhere in the world. It Harmonization international accounting standards essay besides better the inclination for accounting criterions throughout the universe to be raised to the highest possible degree and to be consistent with local economic, legal and societal conditions.
The seven firms advocate a single worldwide framework for financial accounting and reporting based on high-quality IAS. Securities Exchange Commission SEC is increasing its involvement in a number of forums to develop a globally accepted, high quality financial reporting framework.
The United States and Europe are the two most important capital markets. Conclusion Approximately one-third of the 62 countries surveyed had responded to the challenge of convergence with an active agenda and had already proposed changes to national requirements.
Another political obstruction that may originate, which is discussed by Nobes and Parker is that there are several states that are non in the presence of strong adept accounting organic structures.
Conceptual framework is costly to develop. New standards in developping countries How developing countries respond to the forces driving globalization will affect their growth rates, and development in the coming decades.
Each country has its own set of rules and Accounting Philosophy, it will try to protect their procedures against a set of unknown standards, which they will be obliged to use. Despite the benefits, there are a figure of barriers and hurdling that need to be overcome in order to convey about the harmonization of international accounting criterions.
According to Belkaoui A. In addition, while the accounting standards used must be high quality, they must be supported by an infrastructure that ensures that the standards are rigorously interpreted and applied, and that problematic practices are identified and changed in a timely fashion.
The IASB wanted to work through national accounting organic structures but this is an issue as they are non all states have effectual organic structures. The wave of the future is in flexible production and flexible organizations. More plainly, those seeking to raise funds will need to have their local adoption of IAS converge with the U.
This means that a company looking for naming in another state does non hold to set its studies to carry through the specific national demands if the studies are already in understanding with IASB criterions Deegan If there is no organisation, which observes the application of the standards then there is the risk that the standards are interpreted and applied differently in our opinion.
It depends largely on how the governments of these countries respond. To measure these economic activities fairly and free form any bias accounting standards are necessary. The following example will make this more clear.
In other words the access to main financial markets will become easier for global acting companies and by this it will be possible to acquire capital simpler for them. Setting conceptual framework is also economical for the country. Having one international accounting linguistic communication is good for the worldwide comparing of statements and comprehensibility.
For example, it would be difficult for Germany to apply its diverse company law to the American system, which considers only a division between listed an non-listed companies. Major changes to international standards are being considered, and the differences between national and international standards will increase unless national standard setters redouble their efforts to keep pace with the changes.
However, the convergence of a worldwide IAS with that of the accounting standards of the U. The demand for the harmonization of IFRS is decidedly apparent. The IASB wanted to work through national accounting organic structures but this is an issue as they are non all states have effectual organic structures.
With other words, similar Accounting Standards lead to a better comparability between companies. In countries where institutions are not deeply rooted, shifting to the new business model may meet less resistance than in countries where those institutions are more developed.
As a result, these countries may fall even further behind during this wave of globalization. Numerous faculty members Ali.
It will besides better the inclination for accounting criterions throughout the universe to be raised to the highest possible degree and to be consistent with local economic, legal and societal conditions.
That means harmonisation does not focus on the elimination of differences but on the reduction of contradicting rules. As discussed earlier there are a great figure of benefits that would originate from this patterned advance. Despite the benefits, there are a figure of barriers and hurdling that need to be overcome in order to convey about the harmonization of international accounting criterions.The International Accounting Standards Board (IASB) is a wide group of people who are independent and are involved in the development and management of the International Financial Reporting Standards.
The appeal of international accounting harmonization has been extensively discussed. We will write a custom essay sample on Advantages and barriers of harmonizing International Financial Reporting Standards throughout the We will write a custom essay sample on Advantages and barriers of harmonizing International Financial.
This essay tells about Australian accounting standards developed in. implication of adopting international accounting standards. There is lot more discussion. about harmonization of accounting standards.
Conceptual framework in Australia: According to Belkaoui A. R., and S. Jones, Conceptual framework is a set of. ACCOUNTING Harmonization of Accounting Standards Samir S.
Mogul International community has long back recognised the need for moving towards harmonisation of the accounting standard across the globe. Harmonisation of accounting standards Essay Sample.
International accounting harmonisation can be defined as “the process of bringing international Accounting Standards into some sort of agreement so that the financial statements from different countries are prepared according to a common set of principles of measurement and disclosure”.
Advantages And Barriers To Harmonization Of International Accounting Standards – Essay Posted on July 11, January 4, by bros2qET1 The development of international trade and capital flows that has occurred over the old two decennaries has increased the desire to harmonize accounting criterions across the Earth.Download