Advantages And Disadvantages Of International Accounting

The purpose of this paper is to address the advantages and disadvantages of accounting harmonization.
International harmonization of accounting has been defined as “the attempt to bring together different systems. It is the process of blending and combining various practices into an orderly structure, which produces a synergistic result”. (Samuels & Piper, 1985, pp 56-7). On the other hand, some also view harmonization as the same as standardization. However, whereas standardization impels to that elimination of alternatives in accounting for economic transaction and other events, harmonization refers to the reduction off alternatives which basically allows different countries to have different standards as long as the standards do no conflict.
Nonetheless, the truth of the fact is that the ultimate goal of harmonization would be that all companies around the world be fowling similar accounting standards and principles.
So for the purpose of this paper let's take a step back and look at the main reasons for why financial reporting practices still differ across most countries today. Since the 14th century when the double-entry accounting system bookkeeping was developed by in Northern Italy and used by Venetian merchants. The two different accounting methods, Anglo-Saxon and Continental-European have always managed to co-exist separately. However, due to the rise of the emerging markets, international harmonization of accounting standards is an important topic in this globalizing economy. Standard setters, company managers, and researchers alike are interested in the evolution of global standards. All current indications are that harmonization will be a ready, it is just a matter of how fast it will happen, who will set the global...

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... used throughout the world, The International accounting Standards Committee (IASC) was the first international standards-setting body formed in June 1973. The IASC operated until April 1, 2001 when it was reorganized and became an independent international standard setter, the International Accounting Standards Board (IASB).

However, the company that implemented the most innovation in the accounting field of that time was the Carnegie Company that established a direct connection between the railroad industry to the manufacturing industry by applying the same costing methods. All of the departments were keeping track of the quantity and price of materials and labor for any order. All the data was logged into costs sheets that the accountants produced each day. It was the Carnegie Company that made common the widespread use of the cost sheets to calculate prices.