Question

Do you think it is realistic to expect that there will eventually be an internationally uniform set of accounting standards? What factors would work for or against achieving and maintaining this aim?

Answer 1

Uniform set of accounting standards internationally may be a trending issue for next decade.

Factors that would work for maintaining this aim-

a) Increasing Globalization- With many international treaties being signed, many international forums set up, many countries are expanding their business operations globally. This requires a uniform set of accounting standards for ease in reporting and decision making.

b) Overseas Investments- There is huge inflow and outflow of investments. Investors tend to invest in many countries. They expect uniform accounting standards for informed decision making.

c) Company chain- Many companies have chain holding pattern of control, lying in different parts of the world. A uniform accounting standards would enable them for intra-firm comparisons.

Factors that would work against maintaining this aim-

a) Different laws- Laws of different countries are not uniform. Hence, this would be very much challenging to develop such a uniform standard that could comply with all laws of globe.

b) Values and customs- People in different parts of the world follow different cultures, customs and values.

c) Different GDPs- Countries differ in terms of growth and GDP. Laws for developing country may not be applicable for developed countries and vice-versa.