Week 2 Assignment Xuelian Li Essay

Despite those enormous advantages, it has been argued that IFRSS adoption lead to significant costs. The main argument is that IFRSs do not consider local needs and priorities as every country has their own ‘business environment, legal systems, cultures, language and political environment’ (Henderson and Peirson, 2000 cited from Malthus, S., 2004). However, to overcome this problem, IASB can accommodate flexible reporting standards that enable companies to choose alternatives that are more suitable for their external condition. It is opinion of some opponents of IFRS adoption that IAS is ‘insufficiently detailed’ (Uddin,M.S., 2005, p.4) that require accountants’ and auditor’ professional judgment. However, overly detail might be contra productive and not flexible in anticipating every changes and differences.

Fosbre, Anne, Ellen M. Kraft, and Paul B. Fosbre. "The Globalization of Accounting Standards: IFRS Versus US GAAP." Global Journal of Business Research. 3.1 (2009): 61-70. Web. 27 Mar. 2012.

Access to capital markets in United Kingdom is easy after the adoption of IFRs. Public capital markets play an important role in financing the activities of non-financial companies in the United Kingdom, providing them with the main option to bank loans and private sources of finance. These set of international accounting standards helped reduce the information processing and auditing costs to the UK’s market participants. With the help of adoption of IFRS it is expected to lower information costs to capital markets, and the UK

The IFRS is basically a set of accounting rules which are issued by the IASB based in London, UK. These accounting standards have originated from its predecessor IASC defining the term IAS, which occurred in the 70’s. it was only after 2000’s that the IASB took a strong hold under the label IFRS claiming to be a lot more independent even though pertaining to its predecessor, efficiently staffed and better funded. Caffermen and zeff (2006) discuss about the gradual spread of accounting has made a considerable progress over time, and with the adoption of IFRS worldwide, accounting procedures could be smoothened.

International Reporting Standards (IFRS) are standards that are aimed as a global language that is common for affairs of business, to make sure that the accounts of the company can be understood and are of a certain standard that applies worldwide. IFRS are

In most of the countries accepting IFRS, include Continental Europe, IFRS pledge more comprehensive, accurate and timely financial statement information. Compared to unknown financial statement information from other sources, IFRS lower risk to investors. Investment professionals can forestall financial statement information from other sources, but most small investors couldn’t anticipate these information, in this case, IFRS enhancing financial reporting quality make small investors to compete better and decreases the risk. IFRS can lower the cost that investors spend on processing financial information by standardising reporting formats and eliminating international differences in accounting standards. Investors are more likely to gain from enhanced market efficiency, which can be done by decreasing the cost of processing financial information. Barriers of cross-border divestitures and acquisitions can be removed by decreasing international differences in accounting standards, this would benefit investors with enhancive takeover

IFRS was created in 2001 with nearly the same objective as FASB, creating high caliber, effective, and efficient standards not just locally but globally. Their headquarters are in London, England. Within a 15 year span, almost 120 different countries have begun to follow and report under IFRS. By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier and allowing them to engage in different markets (IFRS, 2016). IFRS is seeking unity so it is easier to compare financial reports country to country. This will make companies marketable in foreign places and allow foreign competitors to easily enter different markets.

The IFRS are made to be a common global language used for accounting and business in order for an organisations monetary situation is easily understood and interpretable between different countries (Eng, Sun & Vichitsarawong, 2014). For example, financial reporting in Saudi Arabia of an organisation may look more favourable than an Australian company, because of the different measures used by

(Horton et al., 2013) stated that the adoption of IFRS (IFRS) requires changes in the financial and accounting area, in most systems and processes, as well as in the area of human resources companies. The accounting policies in accordance with international standards are definite principles, techniques, sources, agreements and practices implemented by an enterprise in preparing and presenting financial statements IFRS IFRS-audited according to IAS and ISA-COSO internal control, putting in operation and economic good accounting for disclosure of general purpose accounting information

With complete notion and awareness of how each country has their set of rules, “the goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements” (Rouse, 2011). This view is meant to provide general guidelines, as well as international comparisons through conventional and edifying means. To bring broader and vivid objectives, IFRS replaced IAS, the older standards, in order to bring a more comprehensive and simplified accounting procedures.

The International Financial Reporting Standards, otherwise widely known as the IFRS, are a set of high quality financial reporting standards that are designed to be used globally by profit making enterprises. The continuous development of such international standards is an example of the international harmonization witnessed in the global financial sector over

According to current literature, the global movement to adopt International Financial Reporting Standards (IFRS) is the paramount financial reporting issue of the 21st century. More Than 100 countries in the world use IFRS as the basis of financial reporting.

United States supports IFRS standards, but does not emphasize on its full enforcement. This issue has been in debate for years. SEC has shown its immense support to meet the growing challenges of IFRS acceptance in the United States. SEC has allowed many foreign firms to form their financial statements pertaining to IFRS. Few companies have attempted towards the use of IFRS standards. SEC plays a vital role in the International Organization of Securities Commission, where companies that are operating in foreign market were recommended to implement “Thirty core” standards formed by an international accounting standard committee. In addition, SEC also supports the Norwalk agreement where both FASB and IASB commit to form a “harmonized” global standards and willingness to establish a plan to align important U.S GAAP and IFRS standards for financial reporting. (FASB website)

The International Financial Reporting Standards (IFRS) - the bookkeeping standard employed by organizations in more than 110 countries has some key contrasts from the U.S. sound accounting guidelines (GAAP). At the reasonably level, IFRS is viewed as all the more of an accounting standard which is based on principles as opposed to U.S. GAAP which is viewed as a standard based on rules. IFRS, ostensibly, incorporates and displays the financial aspects of a transaction better than U.S. GAAP.

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.