Harmonization - CASE31

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 CASE 3-1 Harmonization can be defined as  adjustment  of differences and inconsistencies among different  measurements methods procedures schedules specifications , or  systems  to  make  them  uniform  or  mutually compatible. It is the process of minimizing the differences in financial reporting practices across  national boundaries. Accounting and accounting practice varies across countries due to differences in  culture, religion, history, legal and taxation systems, financing and business ownership systems, and level  of economic development. In recent decades, the process of globalization has created the demand for  accounting harmonization. Unfortunately, the process of conforming to a single uniform standard is  proving to be easier to talk about than to implement. There are many potential advantages associated with harmonization of accounting standards.  First the  global economy could benefit through increasingly educated investment decisions which would lead to  overall economic growth around the world.  Accounting information can be interpreted by experts to  reduce the risk of investment.   One of the main tools used in financial analysis is the comparability of financial information for similar  businesses in competition.  Internationally adopted accounting standards would increase this ability to  compare similar industries and make investment decisions less risky through greater intelligence.   A standardization of international accounting information would facilitate easier interpretation for  financial experts all around the world seeking to invest internationally.  This increased ability to interpret  information could potentially result in an overall increase in educated global investment.  It can also be  viewed as the cost-effective approach because it will eliminate the expenses of translation of financial  statements and increase ease of business.  Multi-national corporations who must reconcile their  accounting information for multiple accounting standards will no longer have to do so.  
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Harmonization - CASE31

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