Question

Why would accounting law convergence across nations be a valuable achievement?

Answer 1

Accounting is the language of the Business.

Decades back, there used to be many tariff and trade restrictions imposed by nation states for the export or imports.

Since the advent of Globalisation, world is free market where a person is free to purchase from any person in the world.

But still there arises some difficulties due to multitude of accounting laws in different countries.

Multi National Corporations which are emerging to conquer foreign market find it very difficult and time taking to convert their financial statements into their home currency as the accounting standards used in the host country differ from the accounting standards used in the home country. The main purpose of IFRS is to eliminate such differences.

Therefore, it would be a valuable achievement with the advent of accounting law convergence.

Many of such difficulties can be eliminated and business entities can run without any barrier of physical boundaries of the countries where they are being run. People across the world can understand the financial statements of the business entities all over the world.

It will be even easy for the professionals to render their services.

Hope this is helpful!!