Question

Considering the viewpoint of Governments

Two advantages of international accounting standards

Answer 1

Two advantages of international accounting standards from the viewpoint of the government

• Modernized administration by one central authoritative body

Adopting a single and unified set of global accounting standards would also allow rule- and policy-creating authority to be vested in the hands of one central authoritative body. In contrast, the current rules and standards for the various accounting systems are set by each separate country’s rule-making body alongside the IFRS’ international standards committee. The current system often leads to friction between individual countries and international regulators. This adds a great deal of time, money and aggravation to the process.

Disarray in regards to bookkeeping guidelines and best practices would have an evident road for goals with a focal expert. This would additionally decrease the costs that organizations right now bring about as they endeavor to untangle differing worldwide bookkeeping principles.

The Potential Drawbacks Associated with a Unified Set of Global Accounting Standards

• Enhanced comparability across businesses and between countries

Perhaps the single largest benefit of adopting unified global accounting standards would be an increased ability to work seamlessly with and across different countries. For instance, because accounting standards currently vary from country to country, potential international investors are braved with a number of obstacles that lengthen processes and require a great deal of up-front work.

Right now, if potential investments are to be compared, the investor must accommodate the books of both companies to create a unified picture before making any decisions. Creditors face related issues when evaluating and analyzing the creditworthiness of companies in different countries.

These issues with comparison are not only challenging for larger corporations but also leave small businesses at a significant disadvantage. More small businesses would likely be able to effectively consider international investment options if there were a single global set of accounting standards to follow.