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

Still ev en if m any of the selling points of i fr s

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Unformatted text preview: round the w orld. Still, ev en if m any of the selling points of I FR S are ov erstated, the risks to the U .S. of adopting those rules are exaggerated, too. For instance, opponents of adopting I FR S often claim that those standards are inferior to G AAP. They point out that I FR S offer m ore discretion and less guidance than G AAP. Again, these argum ents m iss the crucial point that factors bey ond the accounting standards play a significant role in determ ining com panies’ reporting practices. That is, ev en if I FR S w ere inferior to G AAP, the standards w ould be applied w ithin the U .S. institutional infrastructure, w hich features strong capital m arkets, SEC enforcem ent and priv ate securities litigation. This env ironm ent prov ides m any incentiv es for transparent and truthful reporting, and these safeguards w ould rem ain in place after the adoption of I FR S. As a result, it is unlikely that U .S. reporting quality w ould deteriorate significantly . Sim ilarly , the frequently v oiced concern that the I ASB could set new I FR S th...
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