BUACC2606 Financial Accounting Semester 2, 2012 Assessment weight: 25% Due Date: Week 10 Length: 1500 words maximum Group Assignment: 2 people Format: Refer to marking guide attached Research...

The need for global uniformity in accounting standards comes from the fact that in today’s flat world where the
activity of companies, investors, customers are expanding globally and this move has urged global community to
have a common accounting policy and high quality financial reporting framework to ensure transparency in the
system. During last few decades’ global market has witness significant changes in the form of demography of
usiness, increasing competitiveness, environmental issues, and change in political and financial climate, new
inventions which have propelled the community to expand beyond their home ground for better opportunities
available globally. Flows are being exchanged and cross border investment are taking place in large quantum by
companies. Mergers and acquisition across border have become very common and companies are eying different
growth opportunities across globe. For example in recent past Africa and Asia have become important investment
destination where companies across the globe shown business interest through both organic and inorganic route.
moreover companies in one country are also raising capital or financial resources from other countries by listing
their shares and bond in respective exchanges and thus in order to do so they have to abide by the norms of stock
exchanges in terms of investor relation. They are bound to furnish the financial report with reverent accounting
standards applicable in those counties, adequate disclosure norms in the format set by the regulator. For example,
out of approximately 3000 listed companies in United Kingdom stick exchange, 500 company’s shares in listed in
different exchanges across the globe. Similarly out of 2500 companies listed in USA, 400 are listed in other global
stock exchanges. Therefore the complexity of these companies can be measured and many a times these
accounting and disclosure factors act as a dete
ent for raising capital in other parts of world. Thus in order to
smoothen the process and requirement the regulators across the board need to ensure that quality and
comparable disclosure of financial statement should be made available to the community. There should be
common practise followed by all which be initiate for setting the financial reporting framework. Therefore there is
a need that regulatory bodies across the globe should form a committee and address these issues so that an
appropriate solution is provided which could be win-win situation for all. Thus this act laid down the foundation to
have common financial reporting framework that will facilitate better understanding and interpretation of the
financials with complete and thorough disclosure which is required by investors to take informed decision.

Different counties follow different accounting practise based upon their need and understanding where some are
liberal others are conservative; some are biased...