Financial Accounting Theory (5th Edition)

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Matt Steger ACCT 803 Seminar 23 – Standard Setting: Political Issues (cont.) In the final portion of this chapter, Scott discusses several of the implications of the international integration of capital markets. This is his final chapter of the Theory textbook and, thus, ends with a summary of the paradigms that were discussed at length in the preceding chapters. With the convergence of accounting standards, “[i]t is argued that integration leads to better working capital markets, increased investment, and more efficient contracting across integrated markets” (Scott, 496). As we have seen throughout the course of the past several years, it is the IASB that has made the most progress in the attempt to integrate accounting methods worldwide into a uniform set of standards. We are told that because of the “differences that remain, full standards convergence may take some time and will likely require agreement on a common conceptual framework” (497). Scott discusses the differences in financial reporting between countries that are “common” law versus those that are “code” law. He cites multiple studies in discussion which consequentially complicate the idea of an international set
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