Report provides survey of global rules
Seven of the largest accountancy firms have pooled their resources to publish a survey of differences in domestic and global accounting rules with a view to showing where progress needs to be made.
The research provides a ‘snapshot’ of the disparities between national and global financial reporting rules in 53 countries from five of the world’s continents, representing 95% of the world’s gross national product.
All national accounting rules are significantly different from each other and the treatment of global accounting standards differs greatly from country to country, according to the survey.
Brian Shearer, technical partner at Grant Thornton, said: ‘Convergence of accounting standards is an urgent issue because of our worldwide internet information systems and increasingly global capital markets. It does not make sense for companies reporting their information on the world wide web to communicate in so many different, non-comparable financial reporting languages.’
The project stems from an accelerated interest in the development of international accounting standards and demands by the World Bank to encourage more collaboration between accountants, investors and regulators. The survey supports the work of IFAD, the International Forum for Accountancy Development, established in 1999 and is a product of those demands.
In the introduction Chris Nobes, PricewaterhouseCoopers professor of accounting at Reading University and editor of the project, warned that harmonisation of accounting standards would not be achieved without substantial co-operation between government, business and the accountancy profession.
Nobes also emphasised that without the development of educational, professional and regulatory infrastructures the adoption of global rules could be more detrimental than beneficial.
Tsuguoki Fujinuma, president of IFAC, the global body of accountants, welcomed the research: ‘The report is a critical first step in understanding the current international accounting environment. It will assist the profession to play its part in improving worldwide accounting practices.’
The firms selected 60 accounting measures in IAS and asked partners to benchmark their local written rules against IAS measures. The project involved several hundred partners and managers from around the world from Arthur Andersen, BDO International, Deloitte Touche Tohmatsu, Ernst & Young International, Grant Thornton, KPMG and PricewaterhouseCoopers.
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Americas look at accounting disparities