Harmonization of accounting standards did not present itself until the 1990s when the accounting board talked about a new technique to use internationally. The main effort for implementing harmonization of accounting standards was to better business practices from country to country. Different countries may have different accounting standards so in order to do business; buypsychedelicaustralia they need to be following the same accounting measures. The main international organizations are the United Nations, International Accounting Standards Committee, and EC. The talk between these groups was to follow one accounting standard for international organizations and United States organizations. This idea would resolve some conflicts that arise due to the language barrier between countries. Of the major international organizations, the EC had adopted the idea of harmonization for reporting of accounts. However for these international organizations, freepornoavis there was no consensus on what should be harmonized. As author K. Van Hulie said, “There is no general agreement on what should be harmonized: the annual accounts, the consolidated accounts, the accounts of all entities, the accounts of all companies, the accounts of listed companies, the accounts of large companies, etc.” (Hulie 390). Since organizations conduct their work differently from others, it is easy to see why there was no clear agreement. Some problems stem from countries unwilling to present their financial information which creates issues. An agreement amongst the international organizations is crucial to the way accounting is done around the world. The harmonization of accounting standards would make a tremendous impact on accounting worldwide.
Having the harmonization of accounting standards would allow countries to share compatible financial information with each other. This would seem to make international business easier to follow because each would be following the same accounting practices. This idea seems to be a good one because there may not be as many controversies when it comes to financial information. The reason for this would be because if everyone had the same practices to follow, foutatunisia they would know what they could and could not do. Now there is the concern over the size of businesses because not all businesses are the same size. There are much larger businesses than others and this could have an effect on whether harmonization is a good idea. As Aziz Jaafar says, “Firm size is another important determinant and the evidence shows that larger firms provide more voluntary disclosures” (Jaafar 159). The larger firms are exposed to the public more often than smaller firms which is a key reason for them to present their disclosures voluntarily. Not only is the size of businesses impactful, but also the countries themselves. Countries vary in size and because of that, some may produce better financial information than others. In saying this, it is a possible reason for not wanting to follow the same accounting rules. To go along with the size of the countries, there is also the number of firms in each country. Financial information will be different from country to country, but some countries may not want to have their information compared to larger countries. As good as the harmonization of accounting standards sounded; Deli Larchmont NY there was change over after some time had passed to a new idea called convergence accounting.
The harmonization of accounting standards was an idea to have countries follow the same accounting practices whereas convergence is the idea of following a single set of accounting standards. This has become the latest idea used today in the world of accounting and it actually has been around for many years. Convergence has always been discussed as a possibility, but never came to tuition. It seems that this idea has reappeared and is getting serious consideration for accounting internationally. However, there is a bit of controversy surrounding this idea which is why it has not been implemented. Going back to previous issues with harmonization of accounting standards, convergence has some of the same issues to worry about. There is the issue of having countries of different sizes and some of the smaller countries may not want to partake in convergence. There was also the issue of a financial crisis taking place that had people skeptical if they could trust using the same accounting standards. Parmod Chand and Rajini Mala are quoted as saying, “Given that International Financial Reporting Standards (IFRS) have embraced FVA, this financial crisis raises concerns about their suitability for financial reporting across the world” (21). This is an issue that could cause this idea of convergence to be a failure because of the fear of suitability of financial information. If however the idea of convergence has nothing to do with the financial crisis, all will be good with this idea. Convergence seems to be the go to plan for accounting standards as it has been agreed upon by accounting members.
Looking back over the past few decades, we can see that there have been multiple ideas regarding what accounting standards to use. Harmonization of accounting standards was pondered and was even tested to see if it could work. Unfortunately, it was unsuccessful and an old idea was brought back up. Convergence was always an idea amongst the accounting board, but was never put into action. It took until recent years for the idea of convergence to take off and be approved. Today it should be about compatibility and the use of equal accounting standards internationally. It would simplify things among countries as there would not be any discrepancies in the accounting standard. Even though harmonization did not take off, streetwear it was a good thought and it led to the start of convergence again.