Long before the present economic crisis unfolded, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) had been working to achieve harmonization in accounting and financial reporting standards across the globe. Now that the world economic community has become more integrated, cross border flow of capital has gained unprecedented momentum and steps are underway to achieve this goal as early as possible. Initial efforts to harmonize local accounting principles and practices with those followed in developed economies were generally aimed at facilitating foreign multinationals operating in other countries. The desired goal of harmonization now ought to be formulation of accounting standards that would facilitate optimal resource allocation for economic growth and prosperity and proper training of accountants with an informed professional outlook. Harmonization of accounting practices and procedures in emerging economies, therefore, should not be viewed as simply a process of complying with externally imposed standards. Rather, the process should involve exchange of ideas among all the participants. For such exchange of ideas to be meaningful, a critical examination of the factors that contributed to standards of reporting financial information is necessary. Discourse on such a vast topic requires an extensive work, which is beyond the scope of this paper. However, since United States of America has been at the forefront of codifying accounting principles, this paper is selectively focused on some contentious financial reporting issues and controversies that have impeded the development of a cohesive theory governing accounting standards for measurement and reporting of enterprise performance.
Emerging economies, Capital, Accounting, Finance
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Omer, K., & Wadhwa, D. (2011). International financial reporting standards: A cautionary note for emerging economies. Business Review, 6(1), 9-26. Retrieved from https://doi.org/10.54784/1990-6587.1179
March 02, 2021