Question

It is argued that culture (Wong, 2004) and non-compliance with IFRSs (Ali, 2005) are two major barriers to harmonize accounting standards globally.

1. Briefly discuss the above statement in the Introduction section.

2. Do you agree that culture can be a barrier to harmonize accounting standards throughout the world? Discuss with examples and provide your own comments.

3. Do you think that compliance with IFRS is essential to harmonize accounting standards globally? What are the reasons for non-compliance with IFRS? Discuss with examples.

4. Do you think harmonization of accounting standards is possible? Justify your answer.

5. Summarise the above questions in the Conclusion section.

Answer 1

INTRODUCTION

The International Financial Reporting Standards are form to bring the unity in global economy . They are formed by non-profit organisation International accounting standard board(IASB). The non- compliance of IFRS result in difference in the economy . Economic transactions are measured with the accounting standards follow in different countries they may vary from country to country but th global economy has created a need of uniform standards.

Culture differences may create a difference in global economy as each country has different norms standards set .It is definately true that difference in culture and non-compliance with IFRSs are two major barriers to harmonise accounting standards globally.

MY VIEWS

In my point of view Culture defiately acts as a barrier in harmonising accounting standards throughout the world. Culture is a concept that influence every aspect of society.As far as accouning sector concern culture also plays a vital role .cultural differences make it difficult to follow the accounting standards and bring a uniformity globally.

For example The German accountants exhibit more of a conservative bias than USA.

When the same economic facts and financial reporting guidlines provided the accountants of USA

and Russia provide different contigency recognition and disclosure dcisions

As per Accounting standards it is required disclose accounting policies follow but in so many countries

these standards wer not follow

So, it is clearly stated that the culture act as a barrier in harmonising with accounting sandards in the world

Yes, it is very important for the world to follow the IFRSs to harmonize accounting standards globally . IFRSs are made to bring the unity in global economy . So that a uniform procedure can be follow world wide .

Reasons for Non-compliance with IFRS

• Difficulties in interpretation of accounting and aditing standards
• Lack of proper knowledge of accouning
• Shortage of professional accounting staff
• The different business culture follow
• No proper training is given for how to cope up with change

For example ,

IN EGYPT

It is found that there is procedure - oriented accounting education, insufficient role of accountants in monitoring Auditors performance, not focused in the disclosure requiremens only in book keeping

CONCLUSION

A journey has been started long before to bring the uniformity globaly by making common accounting standards in the whole world . we can definately harmonize the accounting standards globlly we just need to follow some basic guidlines and we will definately achieve it . The day is not far away when we will observe that accounting world is controlled and guided by a single set of standards .