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International Harmonisation of Accounting.

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Introduction

International Harmonisation of Accounting I will begin by making just a brief comment on international harmonisation of accounting, following this I will put forward arguments both for and against the harmonisation of accounting. The aim of accounting harmonisation is to make the financial statements of companies comparable with the financial statements of companies in other countries. There certainly is no question that a standardised single set of international rules is needed. The harmonisation of accounting sets out a common set of standards, so that analysts, users of financial statements, people who make economic decisions, investment decisions have, in a sense, the same or equivalent information and they can compare the information that they have therefore enabling them to make those decisions. ...read more.

Middle

H1(Professor Oriol Amat Universitat Pompeu Fabra) Accounting harmonisation will assist companies and investors and, consequently, the efficient operation of capital markets. The cost of an accounting system within a multinational is increased both by the cost of designing and running different accounting systems in different countries, and the cost of adjusting accounts from different countries to the accounting system of the country of the holding company for consolidation purposes. Accounting harmonisation is an important issue. For the Single Market there can be no doubt that everything must be done to lower the cost of capital, to increase investment and to reduce unemployment. If harmonisation can contribute to these objectives by facilitating the access of European companies to the capital market, there is a lot to say in favour of such harmonisation. ...read more.

Conclusion

In some cases extraordinary lengths have to be reached to train and educate people about the international standards. Despite the efforts of governments throughout the European Union, and the accounting profession through the IASC (International Accounting Standards Committee), substantial variations in accounting rules and practice continue to arise between different European countries, these variations give rise to both financing and compliance costs for European multi-nationals In conclusion I think harmonisation of accounting is important, we need a single set of standards for everyone to follow, accounting harmonisation can help lower the cost of capital, increase investment and reduce unemployment, these points need to be addressed in order to support the Single Market, but for harmonisation to work consistent interpretation, a rigorous and internationally consistent enforcement mechanism and audit ability are three important issues that we need to keep in mind. ACF110C2B Accounts Coursework Essay William Watt 1 ...read more.

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