IFRS: Beyond the Standards
In the year 2002, European Union’s regulation for public limited companies helped a lot in building the momentum in an optimistic manner related to global standard convergence. Today more than 100 countries have already implemented the IFRS. The chairman of the IASB, Mr. David Tweedie confessed that by December 2011, IFRS and U.S. GAAP should be quiet similar to each other. It has also been stated that by the same passage of time about 150 countries would be able to implement the similar accounting procedures; there were some countries who implemented the versions of IFRS that have some differences as published by the IASB back in 2007. The commission has shown a tremendous effort and support for a single document of high quality or high value global accounting principles, which would result in means of enhancing comparability.
Research has proposed the two factors that could conclude exact interpretation and practical application of IFRS. These two factors include the national culture and language translation. The main aspect of this article is to emphasize the important hurdles that hamper consistent explanation and practical application of converged standards. Cultural differences have a significant job to do while following the standard accounting principles. The accountant across the globe faces a great deal of difficulty due to the cultural differences in applying the accounting standards. In this research paper four different cultural dimensions have been identified that helps in highlighting the pros and cons present in every culture. These four elements are uncertainty avoidance, individualism, achievement orientation and power distance. Research paper draws attention towards a fact that national culture has a serious influence over the practical implementation of the financial reporting standards, specifically where the judgmental approach is required. In the research paper it has been pointed that accountant from the United States are more conservative than the accounts in Greece. Furthermore, the Brazilians accountants are found be less willing in disclosing the contingencies in the financial statements as compared to the accountants from the United States.................................
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