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How Local Institutional And Economic Factors Influence Arise With Uniform Standards Essay

Decent Essays
Ball (2006) posits “the notion that uniform standards alone will produce uniform financial reporting seems naïve.” Discuss, with aid of relevant literature and examples, to what extent you agree with the above statement.
According to Alexander et al. (2011), stakeholders around the world uses information from financial statements in their decision-making process for many different purposes and it is almost the same on how they use the information in every country. However, there can be differences on the communication that information when different types accounting standards are used. Ball defines that “IFRS are accounting rules (‘standards’) issued by the International Accounting Standards Board (IASB), an independent organisation based in London, UK” (2006, p6). Therefore, they are set of rules where public companies globally should apply to when producing financial reporting. This essay will be looking further into how local institutional and economic factors influence arise with uniform standards while preparing financial reporting in different countries. Based on the findings, this essay will conclude that it is possible to produce uniform financial reporting with uniform standards with some changes to the current IFRS.
Alexander et al. (2011) claimed that setting a uniform standards known as harmonization can increase the comparability of financial information, which allows more transparency for users of the information. Uniform standards can result in a decrease in
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