Benefits And Benefits Of Harmonisation

1354 WordsMar 2, 20156 Pages
Benefits of harmonisation Comparability When the exact same transactions are accounted for differently it becomes difficult to compare for any user. This where harmonisation comes to the rescue as it allows accounts to be compared easily as they are prepared in a similar way. This will allow investors and analyst to make meaningful comparisons. Choi, et al (2002) agrees that stakeholders in general find it hard to make use of information that is not prepared using their domestic ways. Harmonisation will make it more likely that users will interpret the information correctly, and make better decisions based on that information. (Choi, et al., 2002) Reduction of Costs At the moment a lot of international companies experience high cost of preparing financial statements in different countries as they all have different methods and even more so when it comes to consolidating their accounts. With harmonisation there will be reduced cost as they don’t have to train staff in each country differently, they can easily transfer staff without the need for retraining and consolidated accounts will be relatively straight forward. Additionally, international companies will save money as they won’t need to change the format of their financial statements when listing on foreign markets. (Nobes & Parker, 2012) Level Playing Field By introducing harmonised accounting no company can make gain because of the methods of accounting used as all financial statements would be based on the same
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