Question

There are various accounting standards used in different countries around the globe. Different observers have different opinions on why each country should have its own financial accounting standards or if the world should have one set of accounting standards for all counties. List at least four problems caused by accounting standards diversity around the globe. Discuss each of these reasons in short essay format. Why do we need international accounting standards? Why not simply let each country develop and use its own standards and let it go at that?

Answer 1

Ang The fous problema caused by accounting Stendeada diversity card the globe is as falloutsi (4) Reporation of consolidated financial stasernents by the companies. which has foreign operations Exampler Cenesal motors. ich componistons of companies aboas countries for making poortfolio Investments decisions becomes complicated due to diversity in - accounting Raftiges followed Lak of companability of financial Statements when decision we have to make for foreign company acquisition. Complicate companies do gain access to fosieign Capital Maskets Need of International Accounting Standards is as under: (4) It will make financial reporting more transparent. a) It will make financial reporting of global componiej headquartered in one country. Call It will improve international investments as investons and othen stakeholders will find it more convenient to compare thein business performance with other international empomies. car. It will reduce business's costs of preparing financial Statements which is for intermodonal audience. A Simply will letting lead countries develop a using its own standards to the divessity in the accounting practice