Review of Accounting Article
The article on international journal of accounting research on globalized accounting framework
seeks to promote convergence on different forms of accounting standards available globally. The
advent of e-commerce and other complex forms of on-line businesses has necessitated a
divergence from the traditional systems of accounting controls. Purchases and payment of goods
have adopted different forms of deliveries and compensation processes that have called for
evolution of accounting treatment and record keeping. Different countries have different ways of
dealing with unique accounting requirements. International trade has to find the right balance to
accommodate and coordinate the complex systems that are part of the evolving global trade.
International Accounting Standards and the International Financial Reporting Standards have
been compelled to develop new recognizable accounting concepts that harmonizes the different
accounting standards universally and which are acceptable all over the world. International trade
has made globalization a requirement for all major companies especially listed companies that
need to attract investors across the world. Investors from different parts of the world have to
understand the different forms of accounting information hence the international accounting
standards has to provide an acceptable accounting standard that is acceptable worldwide. The
accountings concepts have to be standard to assist investors assess the financial performance of
all international companies. The International Accounting Standards Board (IASB) that sets the
IAS standards has been seeking views of stakeholders around the world seeking to amend the
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current existing standards including the financial accounting standards board in countries like the
US, UK and other parts of Europe, Asia, Africa and the rest of the world.
The accounting standard is practically the grammar of writing accounting information globally
(Ashraf, 2014). The standards have to create confidence on all the users that it actually reflects
the different but acceptable standards that are available universally.
However, the accounting standards have to relatively stable so as to enable the accountants and
other users to comprehend and apply them diligently. Constant changes will make it hard for
countries to keep pace with new development and converged standards would always be obsolete
as new standards would be constantly introduced. Reliability of accounting information and the
accounting standards have to be fairly constant in order to create uniformity and objectivity. The
nature of business in the contemporary world today requires synchronized accounting standards
and quality accounting rules that are acceptable in any part of the world.
The legal and economic systems in a country also have to be considered when converging the
accounting standards. The American Generally Acceptable Accounting Principles have different
aspects of accounting requirement that may not be available or applicable to the international
accounting standards and which if omitted may constitute legal improprieties’ in the US as
envisaged under the Securities and Exchange Commission act. The need for faster and effective
convergence has to be undertaken to avoid the future need of converting accounting financial
reports from one country version to another acceptable version in a particular country.
International Accounting Standards assists in harmonizing the various rules and policies that
companies and businesses follow globally. IAS reduces the need for alternative accounting
concepts, comparability and treatment of different aspects of accounting entries across different
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industries and stakeholders needs. IAS provides acceptable standards in most of the countries
across the world today.
Ashraf, S.H. (2014) Towards the Globalized Accounting Framework, International Journal of