Issues in Financial Reporting

Question 1 a) There argon many benefits to adopting a reproducible set of story standards that define which types of financial transactions and events are to be recognised and how they are to be unwrap in financial statements. Firstly, as businesses become increasingly global, those multi-national companies that coordinate operations overseas will not need to develop a separate set of financial statements for each of the antithetical countries that they conduct operations in. Further, if they are unable to generate the shootd pay within a single country, through the standardisation of account standards worldwide, they are able to have their securities listed on the stock exchanges of some(prenominal) different countries, and as a result expand their bottom of jacket crown funding resources without needing to spend excessive amounts on additional inform costs. This, will in turn, ontogenesis the efficiency of capital flows crosswise nations and reduce the cost of c apital, thereby encouraging to a great extent investors to pursue investing in foreign markets and securities.

Secondly, where companies in different countries prepare their financial statements using the same business relationship rules and assumptions, it is easier and little expensive for investors and other users of financial statements to more accurately and reliably compare alternative investments of local and foreign companies and break out realize where they should invest their funds. This is particularly important, as there has been an increase in the number of investors investing in companies fr om different countries and so, such investo! rs require better quality and easily comparable training to lead them with a reasonable and more transparent initiation for accord and evaluating foreign investments for the purpose of making efficient and useful international investment decisions. Thirdly, international accounting standards and assumptions provide companies with greater flexibility, in that they follow a...If you want to get a panoptic essay, bon ton it on our website: BestEssayCheap.com

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