One Worldwide Set of Global Accounting Standards - HMM

An effort is currently underway that involves a monumental shift in the way accounting and financial information is reported. In progress is an endeavor to move provinces around the world onto one single set of global accounting standards. The body leading this effort is the International Accounting Standards Board ( IASB ), a London-based independent agency. The accounting regime being proposed is referred to as International Financial Reporting Standards ( IFRS ). The stated rationale behind this global effort is one of comparability and uniformity (i.e., all economies around the world speaking one accounting language). This paper examines the contemplated worldwide adoption of IFRS. This paper explores whether a one size fits all accounting regime is viable where economies around the globe, though interconnected, have different histories, different cultural norms, different economic dynamics, different investor and capital bases, and therefore, perhaps different uses for financial information. Do these different cultural norms, economic dynamics, investor and capital bases therefore necessitate different uses for financial information? And if so, how does that affect the stated goal of [a] single set of high quality global accounting standards? It is possible that these different cultural norms, economic dynamics, investor bases, etc. are inconsequential to this worldwide adoption effort? Or, upon closer examination, there may be differences so significant that one single set of high-quality global accounting standards is not viable when each province seeks to adopt, interpret, and apply these global standards locally. It is doubtful whether all major and minor countries around the world can adopt, interpret, and enforce the IASB\u27s IFRS version in a uniform manner. This paper\u27s intent is to explore and highlight the difficulties of this proposition. Part II explains in general terms what the differences are between IRS and the accounting regimes most prevalent prior to the movement towards IFRS. Explaining the differences between IFRS and other accounting regimes helps create a backdrop for the issues involved with switching from a country\u27s local accounting regime to IFRS. Parts III, IV and V study our sample countries-Japan, China, and Russia-and 1) discuss at what stage the particular country is in adopting IFRS; 2) highlight the IFRS issues particular to that country; and 3) analyze how those issues might impact the stated goal of one single set of high quality global accounting standards. These countries have been selected because they are ranked third, second, and fourth, respectively, in the world in terms of GDP and therefore give valuable insight on the issues related to IFRS adoption on a global scale. Finally, Part VI explores possible measures to help facilitate successful IFRS implementation. The suggestion in Part VI is both aggressive and aspirational. But, by making the suggestion, the hope is to foster a full appreciation for the challenges that face this monumental global effort as well as the considerable collective effort that will be required to truly achieve the stated goal of a single set of high quality global accounting standards. Part VII concludes