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Pros and Cons of Convergence of Accounting standard

Pros and Cons of Convergence of Accounting standard

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Pros of convergence of accounting

(a) renewed clarity

(b) possible simplification

(c) transparency

(d) comparability between different countries on accounting and financial reporting

This will result in an increase in capital flow and international investments, which will further reduce interest rates and lead to economic growth for a specific nation and the firms with which the country conducts business.

Timeliness and the availability of uniform information to all concerned stakeholders will also conceptually make for a smoother and more efficient process. Additionally, new safeguards will be in place to prevent another national or international economic and financial meltdown.

Cons of convergence of accounting

(a) the unwillingness of the different nations involved in the process to collaborate based on different cultures, ethics, standards, beliefs, types of economies, political systems, and preconceived notions for specific countries, systems, and religions; and

(b) the time it will take to implement a new system of accounting rules and standards across the board.

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