The issues of harmonisation of financial accounting versus variability of management accounting, and its implications on shareholders

IntroductionAccounting system is developed into two form, pecuniary be and stretch forth report. Both have diametrical focuses and perspectives to facilitate contrasting users? culture need. This paper explores the issues for these two approaches: harmonisation of financial accounting and discrepancy of management accounting. Finally, we discussed its implications for organisation?s current or influent sh beholders. harmonisation of Financial AccountingFinancial accounting provides information to external users much(prenominal) as shareholders, creditors and regulatory agencies etc for making economic decision. Information has to be reliable, comprehendible and easily accessible for today?s general users. Harmonisation would allege to narrow national differences in accounting amount and, facilitates the comprehension and reliable comparison of financial reports from different countries (Rodrigues and Craig, 2007; Saudagaran and Diga, 1998). transnational Companies (MN C) could reduce the compliance cost through suspending preparing different hard-boileds of financial reports when listing on foreign capital markets (Rodrigues and Craig, 2007; S. Henderson et al., 2006; Saudagaran and Diga, 1998). The racy character is another benefit of International Accounting Standards (IAS). Saudagaran and Diga (1997) engraft that IAS are seems to be more flexible and neutral than approximately internal financial accounting standards. Coopers and Lybrand (1995) concluded that IAS did not let step up materials differences on reconciliations of IAS to US GAAP.

In addition, standardisation will negate duplicative costs of national and international standards (A mpofo and Sellani, 2005). R&D costs asso! ciated with adopting IAS are minimal, as result cost nest egg for ASEAN in formulating relevant and acceptable financial accounting standards (Saudagaran and Diga, 1997). This overly benefit to developing countries who unable to afford the cost of topical anaesthetic GAAP. However, social and cultural differences will come alive different readings and interpretations of IAS, which may lead to different accounting practices inwardly a province (Rodrigues and Craig, 2007). The application of different accounting systems to a common set of... If you want to get a liberal essay, order it on our website: OrderEssay.net

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