DB2- Accountants of the World Unite!_ Business Class - Bloomberg

Proponents of i fr s often claim that the new

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Unformatted text preview: Proponents of I FR S often claim that the new standards w ill deliv er significant capital-m arket benefits. For instance, the international rules are said to im prov e the transparency and com parability of corporate reporting around the w orld, w hich, in turn, could low er firm s’ capital costs and increase m arket liquidity . These alleged benefits are alm ost certainly ov erstated, at least, as far as U .S. firm s are concerned. The U .S. already has a sy stem of high-quality accounting standards and it is unlikely that financial reporting practices by U .S. firm s w ill im prov e significantly as a result of I FR S adoption. Sim ilarly , the benefits of I FR S in creating cross-country com parability are exaggerated. With or w ithout I FR S, there w ill be div ergent reporting practices around the w orld because accounting standards are only one of m any inputs that determ ine com panies’ reporting practices. O ther factors include countries’ legal institutions, their capital m arkets, firm s’ business and gov ernance practices, and m anagers’ perso...
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This document was uploaded on 03/06/2014 for the course MGMT 4369 at Texas Pan American.

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