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 minutes and events are to be recognised and how they are to be give away in financial statements. Firstly, as businesses become increasingly global, those multi-national companies that point operations overseas will not need to wee a separate set of financial statements for each of the antithetic countries that they conduct operations in. Further, if they are unable to generate the shootd pay within a single country, through the standardisation of history standards worldwide, they are able to have their securities listed on the stock exchanges of some(prenominal) antithetic countries, and as a result expand their bottom of detonator funding resources without needing to spend excessive amounts on additional insurance coverage costs. This, will in turn, improver the efficiency of capital flows crosswise nations and reduce the cost of capi tal, 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 invoice 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 away 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 from different countries an d so, such investors require better quality! and easily comparable randomness to lead them with a reasonable and more transparent stern for accord and evaluating foreign investments for the purpose of making efficient and stiff international investment decisions. Thirdly, international accounting standards and assumptions provide companies with great flexibility, in that they follow a...If you want to get a ripe essay, bon ton it on our website: OrderCustomPaper.com

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