RESEARCH ARGUMENT

Research Argument

Research Argument

Introduction

Accounting is a set of standards which offers guidance and standardizes accounting practice across the world. They regulate the principles upon which a company financial statements, i.e. its balance sheet , its profit and loss statement, cash flows and other documents to report on its assets in order draw up financial and operating results.

The U.S. GAAP and IFRS are the two leading international accounting systems. The importance of IFRS to U.S. GAAP is at the expense of steadily enhancement. In particular, the obligations of European capital market-oriented businesses contributed to the application of IFRS in financial statements from 2005 and the full acceptance of IFRS financial statements of foreign issuers by the SEC beginning in 2007.

\Nevertheless, these accounting standards was developed to provide best standard regardless of contextual factors such as political, legal, social and historical environments of countries and cultural values of accountants. No matter in which country the accountant belongs to and what culture value they have, the accounting standard has been same for everyone. This research paper is an Argumentative research paper which focuses on the supportive of the of the statement that “Accounting is all about developing the “best” set of standards irrespective of contextual factors such as political, legal, social and historical environments of countries and cultural values of accountants. Researching the influence of national contextual factors and cultural values of accountants on accounting and corporate governance is useless and does not enhance our understanding of accounting and corporate governance theories, practices and policies”.

Discussion

International junction of financial reporting with acceptance of International Financial Reporting Standards (IFRS) by more than 110 countries has increasingly been recognized as an important and controversial topic (Narktabtee K., Patpanichchot S., 2011, pp. 1329).

IFRS is to ensure comparability and reliability of information for management decisions. Accounting and its procedures is carried out by all organizations across the world. This is considered as the main language of business due to information which his required by the accounting managers for managerial decision making. Hence, in short the objective of IFRS is that each company across the globe should follow one accounting standard which should be accepted by them and can make simple and effortless to bring the worldwide business together. It is a set of financial accounting reporting standards which offers a transparency in financial data disclosure.

The widespread of IFRS is continued due to the higher quality of accounting standards that are being accepted. The major reasons that was cited “despite progress in recent years by the FASB and IASB convergence project on its”. However due to the various differences between these different country standards has resulted on the large room to join further. For instance, GSK declared a foreigner with the SEC which prepares its financial statements using IFRS. Note 41 of 2006 20-F filing form of GSK provide details on the reconciliation of company with GAAP in the United States. 13 pages long reference which reveals a huge list of differences in reconciliation ...