The IASB at a Crossroads - Assignment Example

IFRS are increasingly adopted across countries in the world. IFRS is important because different countries adopt differentfinancial reporting standards due to differences in legal systems, business structures and tax systems. Some of the benefits that accrue to countries that adopt IFRS include the elimination of barriers to cross-border investing. IFRS promotes comparability of financial reports across countries through common accounting practices.IFRS increase the quality of financial reports.

IFRS increase the quality of financial reports by reducing accounting differences in financial reports of different countries. IFRS ensures high quality standards in financial reporting of financial statements globally by promoting transparency, accountability and integrity in financial reporting. High quality financial reports enable the making of effective decisions IFRS decreases the cost of capital and provides institutional investors with the ability to make well-informed decisions by comparing investment portfolio.

Companies trading in the stock market are required to comply with IFRS. IFRS helps to reduce information asymmetry and reduces transaction costs thus reducing the cost of capital. This helps attract Foreign Direct Investments. IFRS also promotes better management control systems.Despite the benefits adoption of IFRS faces quite a number of challenges. There is lack of public awareness on the use of IFRS and its benefits to regulatory authorities and investors. This is because of lack of information on IFRS.

There is chronic shortage of competent professionals in some countries especially developing countries to implement IFRS. Most of these countries still use previous accounting practices which IFRS is phasing out. The IASB is ambiguous in its requirement on the adoption of IFRS globally. For instance, the less developed countries would simply adopt the standards without putting in appropriate legislative measures. A few industry players would adopt IFRS and yet the country would be registered as an adopter of IFRS.

The IASB can promote updating of academic curricula in universities and training institutions across the world in order to raise public awareness on the use of IFRS and raise competent professionals who can implement IFRS. IASB can continuously publish pronouncements and embark on capacity building programs on IFRS to provide more information to investors and regulatory authorities.Works Citedwww.ey.comwww.icanig.orgwww.sunnewsonline.comwww.icaew.comwww.charteredaccountants.com