Question

Distinguish between harmony, harmonization and standardization.

Answer 1

THE DIFFERENCE BETWEEN HARMONIZATION AND STANDARDIZATION

Harmonization

– The process to improve the compatibility (suitability) accounting practices by setting limits on how large these practices may vary

– Not using a one size fits all

– But to accommodate some of the agreements and has experienced great progress internationally in recent years

– Harmonization of the far more flexible and open

Standardization

– Determination of a group of rigid rules and narrow

– Application of a single standard or rule in any situation

– Standards do not accommodate the differences between countries

– More difficult to implement internationally

Include the harmonization of accounting harmonization:

1. Accounting standards (which relates to the measurement and disclosure)

2. Disclosures made by public companies associated with the securities offering and listing on stock exchanges

3. Auditing standards

Survey of International Harmonization

Profit International Harmonization:

A. Into global capital markets and investment capital can move across the globe without a hitch. High-quality financial reporting standards that are used consistently throughout the world will improve the efficiency of capital allocation.

2. Investors can make better investment decisions; portfolio will be more diverse and less financial risk.

3. Companies can improve decision making strategies in the areas of mergers and acquisitions.

4. The best ideas arising from the standard pat-making activity is spread in developing global standards of the highest quality.