The International Accounting Standards Board

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The International Accounting Standards Board (IASB) enforced the harmonization of the accounting standards into a single set of accounting standards that is to be used globally in the preparation of financial statements and is called the International Financial Reporting Standards (IFRS). This essay will discuss the benefits of developing the IFRS, which is to enhance and increase the quality of the companies’ financial statements through transparency and comparability, value relevance, timely loss recognition by presenting evidence from Spain and Bahrain. Other benefits include facilitating cross-border investments; reducing equity cost, and decreasing earnings management. Hence, this allows companies to provide information that will be…show more content…
Implementing the IFRS around a large number of countries is essential for enhancing the accounting quality of the financial statements and any disclosed information that are provided by companies to their users. Presenting informational with better quality is achieved by increasing transparency, comparability, value relevance and timely loss recognition.

As for the level and quality of transparency of financial statements, companies operating under the standards of their local Generally Accepted Accounting Principles (GAAP) may continues to present information that may be false and asymmetric. However, other companies that are committing to the IFRS will continue to present information that is clear and understandable (Horton, Serafeim and Serafeim, 2008). The adopted reporting standards require information that is more qualitative and quantitative to be attached to the disclosure of financial statements, which was not highly required by local GAAP (Wright and Hobbs, 2010, p. 23). To increase transparency, “it requires companies to disclose accounting policies, judgements and estimates, as well as additional qualitative and quantitative information related to significant accounting transactions” (Wright and Hobbs, 2010, p. 22). Reporting the substance of transactions by commenting on the realities of what the entities or companies present regarding information about
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