International Accounting and Finance Essay Example | Topics and Well Written Essays - 2500 words

Inter topic Accounting and Finance - try ExampleNotwithstanding the concerns and prejudices, there has been noted an increasing trend towards adoption of outside(a) accounting standards as a preferred financial inform framework. Among the concerns stated by the stakeholders to adopting international accounting standards, many are related to the impact of adopting them on capital markets operations and efficiency and on the users of financial statements. The International pecuniary Reporting Standards are different from the national standards developed by countries for financial reporting within their single jurisdictions. These differences result in significant shifts in their financial reporting practices for business entities, when they decide on their receive or due to mandatory requirements to adopt International financial Reporting Standards as their financial reporting framework. Due to the differences in the respective requirements of different financial reporting fra meworks, there are varying impacts of from each one on capital markets and users of financial information. ... Impact of Adopting International Accounting Standards on Capital Markets The impact of adopting international accounting standards as a financial reporting framework can be determined by understanding the impact of adopting the international accounting standards on the efficiency of capital markets. Keeping in opinion the significant difference in reporting requirements under International Financial Reporting Standards and other national accounting standards, such as U.S. GAAP or other accounting frameworks, a general forethought can be developed that with the adopting of International Financial Reporting Standards, there will be a significant impact on the efficiency of capital markets. Researchers retain investigated whether the impact caused by adopting International Financial Reporting Standards on efficiency in capital markets is positive or negative. Some look fo rers sport noted that the impact of adoption of International Financial Reporting Standards on market can be mensural through variations in the market liquidity and the cost of capital for business entities. In this regard, Daske et al (2008) have noted that with the adoption of international accounting standards, market liquidity is influenced positively, that is it increases. Similarly, another major finding of their research work is that by adopting international accounting standards the cost of capital for firms are decreased, whereas the value of their equity increases (Daske et al., 2008). Daske et al. (2011) have also noted that those firms which are committed to provide highly transparent financial reporting and therefore adopt International Financial Reporting Standards as their financial reporting framework, such firms experience a significant improvement in their respective