article review - The Economic Effects of IFRS Adoption By...

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The Economic Effects of IFRS Adoption By: Barry Jay Epstein Article review by: Saw C. Than Today's traditional investors would rather try to get smaller returns in low-risk investments rather than to gamble their money. These risks can be found from differing accounting principles in foreign countries or even that the same principles are not being entirely followed. Businesses in the US that want to invest in foreign countries can mitigate this risk by researching their target nation’s version of the GAAP or hire a consultant. Usually, a foreign countries financial reporting system is far below the standards of the SEC regulations and can make investors wary of dealing outside the US. This has risen the need for a global set of financial reporting standards, as international business grows daily. The International Financial Reporting Standard, or IFRS, is proposed by the International Accounting Standards Board (IASB), and can be implemented in the US as soon as 2014 if the SEC approves. Other countries are already moving toward global standardization, such as Canada, moving to the new standards next year. In some countries, namely Australia, they have changed their national GAAP to mirror the IFRS, but sometimes this can lead to different variations of the standards, which does little to lessen accounting risks. This has not been the only instance where the IFRS has met trouble in global adoption. In
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This note was uploaded on 03/31/2010 for the course BS bus283 taught by Professor Jones during the Spring '10 term at Aarhus Universitet.

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article review - The Economic Effects of IFRS Adoption By...

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