Question

Describe areas of reporting that are impacted by standardisation of reporting across different industries versus different industries allowed more independence

Answer 1

Following are some of the areas that are impacted by standardization of reporting:

1. Accounting Professionals - The convergence, shift, application and implementation of standards forces accounting professionals to learn and follow the treatment of standards while reporting. It also promotes consistency in accounting practices. The feature of 'universal acceptance' lets the professionals to keep updating themselves with the new amendments related to the reporting of standards.
2. Stock Markets - A reduction of costs will be seen in the stock market that accompanies the foreign exchanges. Along with the stock market other markets also adhere to the same rules given by the standards of reporting in order to compete with the global investment opportunities.
3. Corporate Management - Any change in the reporting of standardization gives the opportunity to corporate management to raise the capital at an effective interest rate along with lowering the percentage of risk. Corporate management gets benefit from streamlined standards and reporting rules.
4. Investors - Due to amendments in various reporting standards and accounting treatment, investors need to update themselves continuously. It is important for investors to re-educate themselves for self-awareness and sustaining the financial knowledge. At the time, this process will provide more credible information and will make the investor more simplified with respect to the standardization.
5. Accounting Standards Setters - There are many people, institutions involved in preparing the reporting standards. They invests time and money for research. Once the standards gets converged, reporting of standards gets simpler and various institutions gets the direction for accounting.