Word limit: Whilst there is not a maximum limit, the minimum is 2,000 words (1,000 words per...

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Word limit: Whilst there is not a maximum limit, the minimum is 2,000 words (1,000 words per person). You should identify the contribution of each member.Assignment requirements.You are to read the report “The case for global accounting standards” by Professor Ann Tarca (UWA) and analyse what the key points are of the report. Then prepare a report either supporting or challenging the position of the author.The report must include clear evidence that you have conducted research to support your position and it must be analytically sound and detailed.There is not a limit on referenced material BUT all sourced references must be clearly identified (within the body of your report and a list of references at the rear of your paper) and must be accompanied with your own comments and views. The references should be considered in the context of supporting your views. 
	
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The Case for Global Accounting Standards: Arguments and Evidence  
Ann Tarca 
Professor of Accounting, University of Western Australia. 
1
Academic Fellow - Research, IFRS Foundation 
 
Abstract 
This paper outlines the arguments for a common set of accounting standards and the forces 
that have promoted adoption of International Financial Reporting Standards (IFRS). 
Widespread use of IFRS since 2005 provides an opportunity for empirical investigation of 
the benefits of IFRS. I summarise results of studies that are relevant for assessing the role of 
IFRS in both developing and developed capital markets.  
 
Introduction 
The expected benefits of global accounting standards are compelling. The use of one set of 
high quality standards by companies throughout the world has the potential to improve the 
comparability and transparency of financial information and reduce financial statement 
preparation costs. When the standards are applied rigorously and consistently, capital 
market participants will have higher quality information and can make better decisions. 
Thus markets allocate funds more efficiently and firms can achieve a lower cost of capital. 
These arguments have been used to support the adoption of International Financial 
Reporting Standards (IFRS) for financial reporting for consolidated listed entities in 
European Union (EU) member states (EC1606/2002). Other jurisdictions have cited similar 
reasons for adoption of IFRS (see Brown, 2011), reflecting the demand for high quality 
standards that can improve the quality and comparability of financial reporting and promote 
the development of national capital markets and the integration of markets internationally. 
For the first time in history, we have substantial numbers of firms domiciled in different 
countries using common standards. Consequently we can collect evidence about the extent 
to which we observe benefits in capital markets. This paper presents research findings 
about the...

David · Accepted Answer

Summary
1. Introduction……………………………………………. 2
2. Point of discussion
The introduction of IFRS injects liquidity in the market…………………..3
Projection of relevant information and elimination of future disclosures.. 3
            Enhancement of trading activity by adopting IFRS………………………..4
            Increment of cross border holding…………………………………………...4
            IFRS brings greater transparency and accuracy……………………………4
            Forecasting accuracy can be done in a greater way…………………………5
            Strengthening of the capital market…………………………………………..5
            Global economic growth and stability…………………………………………6
            Role of CPA……………………………………………………………………..6
3. Conclusion ………………………………………………………………………7
Introduction
.In the year 2001, the International Accounting Standard Board (IASB) which is an independent body based in London brought IFRS into force so that there is a uniformity in the accounting procedures and the investors are able to get proper information about the market.The acceptance of International Financial Reporting Standards has been widely followed because of the consistency in the policy. For the first time it was observed that the firms in various countries are adopting a similar method. It was adopted in 2005 and became the accounting standard for more than 6000 EU firms and for various other firms. This standard was framed many decades ago and this was both in the developed and the developing countries to adopt this and was also useful to the smaller nations who were unable to set their own accounting standards. With the due passage of time as the business and trade became globalized the need for having a common standard was felt by the investors, companies, regulators etc and hence IFRS became answer to it. Hence having a uniform policy will enable to absorb the market information in a better way and the decisions can be taken which will be more reliable. According to (Brown, 2011) the adoption of IFRS helps to allocate the funds in a better way and lower cost of capital can be achieved. Moreover the standard helps to enhance the quality of the financial policy and helps in the proper development of the national capital market. This leads to the integration of the international market. Beyond question adoption of IFRS has enabled to follow uniform rules which implies that the comparison is now possible and standards can be evaluated with much ease.
Before the implementation it was GAAP which was followed and was regarded as a gold standard but the difference still remains visualized. IFRS does not give way to Last in First Out (LIFO) method to be used as an inventory costing method. In case of IFRS the revaluation of assets can be possible. Here only a single step can be used for the impairment process on the contrary GAAP uses two step method. In case of IFRS there happens to be a case of capitalization of development costs when some of the defined criteria are met. Great measure has been taken by the FASB and the IASB to reduce the gap between GAAP and IFRS. The main difference which rests is that the IFRS provides details not on an overall basis and is limited to industry specific. Hence it is not much concerned to the overall details.
Professor Ann Tarca (UWA) correctly highlighted the facts about the IFRS in the research paper. Moreover it is true that IFRS has brought many benefits to the economy because of the uniformity and standards. The investors also benefit from the adoption of IFRS. The key points that are observed and highlighted by Professor Ann Tarca (UWA) are:
· The introduction of IFRS injects liquidity in the market
· Projection of relevant information and elimination of future disclosures
· Enhancement of trading activity by adopting IFRS
· Increment of cross border holding
· IFRS brings greater transparency and accuracy
· Forecasting accuracy can be done in a greater way
· Strengthening of the capital market
· Global economic growth and stability
Points of discussion
The introduction of IFRS injects liquidity in the market
With the introduction and implementation of IFRS there has been considerable change in the market scenario. This is one of the biggest influences of IFRS. According to (Daske et al,

Word limit : Whilst there is not a maximum limit, the minimum is 2,000 words (1,000 words per person). You should identify the contribution of each member. Assignment requirements. You are to read the...

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