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Accounting Standard And International Accounting Standards Essay

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Accounting standard has been introduced after the World War II where every country has its own proper accounting practices such as the United States Generally Accepted Accounting Principles (the US GAAP). As time flies, international trade and foreign direct investment has experience a period of rapid growth where the companies begin to expand their business in a larger scale. Frequent international mergers and acquisitions especially by American corporations to the European companies has created the diverse accounting practices where comparing financial statements between country to another become very difficult to do. To lessen the difference and promote international harmonization in accounting practices, Sir Henry Benson, senior partner in the United Kingdom (UK) firm of Cooper Brothers & Co. led the founding of International Accounting Standards Committee (IASC) and issued the International Accounting Standard (IAS). Since 2001, the new IAS is known as International Financial Reporting Standards (IFRS) and has been issued by International Accounting Standards Board (IASB). Ball (2006) stated in his article that “the notion that uniform standards alone will produce uniform financial reporting seem naïve”. I strongly agreed with this for several reasons which I will discuss further below with real world examples.

There are overwhelming reasons why uniform standards cannot be achieved and will implement unevenly across the world including in the Europe. Depending on
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