Accounting Standards

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Accounting standards
Across the world, many businesses and markets have adopted the use of the International Financial Reporting Standards (IFRS). People and organizations in the business world are increasingly demanding conformity and this has necessitated the shift from the U.S Generally Accepted Accounting Standards to the IFRS. However, in the United States, there is still much reluctance to adopt this change and these has caused a lot of heated debate on whether the businesses and markets should conform to the rest of the world.
In any case it is being realized that the adoption of the IFRS certainly creates a lot of advantages not presently realized in the use of the GAAP. These accounting standards are generally the rules and regulations that companies and organizations are expected to adhere to in the process of presenting their financial statements to the stakeholders(Williams, 2009). The change from the GAAP to the IFRS is certainly needed given that the financial environment has certainly grown more complex and intricate to the extent that such differences in the accounting standards can only create the frequent challenges realized in the transactions(Watts, 2003).
By adopting the global accounting standards, businesses in the United States are likely to benefit from easier comparability hence a bigger market liquidity which would subsequently lower the cost of capital. Multinational companies which operate at home and in several countries abroad will also
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