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Preparing Financial Statements And Costs Associated With It - Book Report/Review Example

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A response to integrating the capital markets suggested the pursuance of a set of common accounting standards. The writer of the paper "Preparing Financial Statements And Costs Associated With It" discusses the high-quality integrated accounting standards…
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"Preparing Financial Statements And Costs Associated With It"

Download file to see previous pages The international accounting standards should supersede or substitute the local GAAPs in the capital markets. The aim of this substitution is to lower the cost of preparing financial statements and other associated costs as well as to increase comparability. FASB and IASB are continually being integrated to result into a high-quality integrated accounting standard. The two bodies individually have several similarities as well as differences (Scott, p548). Both FASB and IASB accounting standards direct that, other comprehensive incomes should immediately follow the net income in the income statement among others. Notable differences arise in LIFO inventory methods and an upward revaluation of non-current assets in FASB and IASB standards. Those differences require more progression in the convergence of the two accounting standards (Scott, p550).
Despite the differences discussed above, high-quality accounting standards should be adopted. This adoption helps economies with weak regulatory environments to operate most effectively. Integration of the FASB with the IASB as illustrated improves liquidity and synchronicity of the economy. Daske and his colleagues examined the outcome of the mandatory shift from local FASB standards to IASB standards. They reported a substantial increase in liquidity in the market among other outcomes. However, Daske and his colleagues qualified their study and findings (Scott, p552). They argued that some of the positive results were due to the increased disclosure regulations after the adoption of IASB standards. IASB standards require full application and disclosure while reporting. Empirical studies have indicated that adoption of the IASB standards results in an increase in market liquidity and financial statement comparability.
Accounting standards in every country must be enforced and applied appropriately. ...Download file to see next pagesRead More
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