A debate has been going on about whether America should switch from Generally Accepted Accounting Principles to International Financial Reporting Standards. Many economies all over the world have switched to these standards and many more are on the verge of converting. The world is a global economy and using different standards to report can be expensive and inefficient. Today companies are competing globally. The United States would be disadvantaged if it does not consider IFRS conversion.
The advantages of making the switch to this new system of accounting outweigh the disadvantages. Companies will easily provide quality financial information which is also consistent. This will mean it will be simpler to compare companies. It will also be faster to raise capital. People who do not want the switch claim there is no agency to monitor the new system and this might lead to fraud.
GAAP is overseen by the Security Exchange Commission. People say that since there is no such body to monitor these new standards then there will be uncertainty in financial reporting. This might not be very true because IFRS is supervised by Internal Accounting Standards Board though not as closely as GAAP is monitored by Security Exchange Commission.
To gain capital companies need to have transparent and trustworthy financial statements. Statements should be monitored to ensure they are more reliable and free of errors. To be able to monitor many companies are at ago you need organizations which are able to oversee them in an efficient way. This fact has led to the emergence of an IFRS regulatory institution. However, currently there is no organization that is monitoring the standards closely. Once the new standards are in place then the supervisory system will be implemented to ensure accuracy and validation of information.
Converting from the old system requires both time and a lot of resources. It costs a lot to convert but it is all worth it in the end. A lot of time is also wasted in converting. However this depends on the company size. All this will pay off when the company is using the new standards because it will be on the same level as the economies of the globe.
Many people want the new system of accounting implemented because it will be more efficient in reporting financial information. It will make the companies more competitive and they will also save a lot of money. More training will make the employees more focused and this will reduce chances of making errors. This will in turn save money on auditing costs.
It will be much easier to compare statements from different companies across the world. Investors and the public will find it easier to research and compare different companies. One language will make the financial reports more meaningful to many people.
If the statements are more reliable and easy to compare then investors will be attracted. This means that companies will also be able to obtain loans from institutions easily. Overall there are less disadvantages of IFRS conversion than the advantages. The economies of the world are becoming integrated and having common accounting principles will make things less difficult.
The advantages of making the switch to this new system of accounting outweigh the disadvantages. Companies will easily provide quality financial information which is also consistent. This will mean it will be simpler to compare companies. It will also be faster to raise capital. People who do not want the switch claim there is no agency to monitor the new system and this might lead to fraud.
GAAP is overseen by the Security Exchange Commission. People say that since there is no such body to monitor these new standards then there will be uncertainty in financial reporting. This might not be very true because IFRS is supervised by Internal Accounting Standards Board though not as closely as GAAP is monitored by Security Exchange Commission.
To gain capital companies need to have transparent and trustworthy financial statements. Statements should be monitored to ensure they are more reliable and free of errors. To be able to monitor many companies are at ago you need organizations which are able to oversee them in an efficient way. This fact has led to the emergence of an IFRS regulatory institution. However, currently there is no organization that is monitoring the standards closely. Once the new standards are in place then the supervisory system will be implemented to ensure accuracy and validation of information.
Converting from the old system requires both time and a lot of resources. It costs a lot to convert but it is all worth it in the end. A lot of time is also wasted in converting. However this depends on the company size. All this will pay off when the company is using the new standards because it will be on the same level as the economies of the globe.
Many people want the new system of accounting implemented because it will be more efficient in reporting financial information. It will make the companies more competitive and they will also save a lot of money. More training will make the employees more focused and this will reduce chances of making errors. This will in turn save money on auditing costs.
It will be much easier to compare statements from different companies across the world. Investors and the public will find it easier to research and compare different companies. One language will make the financial reports more meaningful to many people.
If the statements are more reliable and easy to compare then investors will be attracted. This means that companies will also be able to obtain loans from institutions easily. Overall there are less disadvantages of IFRS conversion than the advantages. The economies of the world are becoming integrated and having common accounting principles will make things less difficult.
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