International Financial Performance Of Companies From Different Countries

1974 Words8 Pages
1. Introduction With the globalization of international trades, it is necessary to design a common accounting language to compare the financial performance of companies from different countries. For this reason, International Accounting Standard Board (IASB) publish the International Financial Reporting Standards (IFRS) which are principle-based in order to improve the quality of financial reporting and to harmonize accounting standards in 2001. According to IASB, over one hundred countries implement IFRS voluntarily or mandatorily. Most EU countries have already allowed the adoption of IFRS. Brazil, China and Canada also approach IFRS in recent years. The adoptions of IFRS are more and more popular and acceptable over the world. IFRS focus on providing the reliable, comparable and connected accounting information to help the internal or external users to understand the financial performances of companies from different countries. The adoption of IFRS could augment the transparency of information and ameliorate the quality of financial reporting. However, do the adoptions of IFRS have really a positive influence on financial performances of companies as expected? This question is already discussed by some papers which provider the several economic consequences of the adoption of IFRS. This paper will review these economic consequences and discuss how the adoption of IFRS influence on the factors. There will be three economic consequences mentioned in this paper:
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