First, we will look at reasons why developing countries choose to adopt IFRS. Ezzamel and Xiao, 2011 mentions the substantial force imposed on emerging and transitioning market economies by advanced capitalist governments, the World Bank, the World Trade Organization, big Audit Firms, accounting institutions like the Financial Accounting Standards Board(FASB) and accounting professions, and venture capitalist, to harmonize their accounting standards to those of IFRS. There are economic and political sanctions these countries have to deal with if they decide not to comply with IFRS. There is little to no option for them to improve their standards in conjunction with developing countries in a way that allows them to have similar but slightly different enough standard to serve their specific needs (Ezzamuel and Xiao, 2011). By not allowing developing countries to develop their own unique techniques and methods within their own economies we could be actually curtailing global economic growth. This type of production blocking can end up hurting the international community as a whole or any group trying to accomplish a goal. Those methods that could be developed by emerging economies could also contribute to improving international financial reporting standards. Transitional and emerging economies like China are said to have been responsible for the recovery of the world economy in the most recent economic crisis (Ezzamuel and Xiao, 2011). This questions the importance of IFRS and whether there are other reasons behind developing countries and international organizations’ insistence on making IFRS mandatory. Pressure from developed countries is not the only reason for developing countries choosing to adopt, allow, or make IFRS obligatory. IFRS is believed to provide more detailed financial reports that also offer a higher level of transparency and comparability. If it is clear that IFRS the optimal representation of a format that can give foreign investors that sense of security than why is it hard for U.S G.A.A.P and IFRS to settle on a set of guiding principles? Is it
First, we will look at reasons why developing countries choose to adopt IFRS. Ezzamel and Xiao, 2011 mentions the substantial force imposed on emerging and transitioning market economies by advanced capitalist governments, the World Bank, the World Trade Organization, big Audit Firms, accounting institutions like the Financial Accounting Standards Board(FASB) and accounting professions, and venture capitalist, to harmonize their accounting standards to those of IFRS. There are economic and political sanctions these countries have to deal with if they decide not to comply with IFRS. There is little to no option for them to improve their standards in conjunction with developing countries in a way that allows them to have similar but slightly different enough standard to serve their specific needs (Ezzamuel and Xiao, 2011). By not allowing developing countries to develop their own unique techniques and methods within their own economies we could be actually curtailing global economic growth. This type of production blocking can end up hurting the international community as a whole or any group trying to accomplish a goal. Those methods that could be developed by emerging economies could also contribute to improving international financial reporting standards. Transitional and emerging economies like China are said to have been responsible for the recovery of the world economy in the most recent economic crisis (Ezzamuel and Xiao, 2011). This questions the importance of IFRS and whether there are other reasons behind developing countries and international organizations’ insistence on making IFRS mandatory. Pressure from developed countries is not the only reason for developing countries choosing to adopt, allow, or make IFRS obligatory. IFRS is believed to provide more detailed financial reports that also offer a higher level of transparency and comparability. If it is clear that IFRS the optimal representation of a format that can give foreign investors that sense of security than why is it hard for U.S G.A.A.P and IFRS to settle on a set of guiding principles? Is it