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Tutorial 03
International Convergence of Financial Reporting
2. What are the potential benefits that a multinational corporation could derive from the international convergence of
accounting standards?
3. What are the different ways in which IFRS might be used within a country?
5. Under what conditions should a firm claim to prepare financial statements in accordance with IFRS?
6. Assume that you have been invited to advise the newly established accounting oversight body in one of the former
eastern European countries that became a member of the EU in May 2004. The accounting oversight body is
charged with the task of identifying the main issues to be addressed in implementing the use of IFRS.
Required:
Prepare a report outlining the key points you would include in your advice to this accounting oversight body.
7. The Financial Times, on Tuesday, April 13, 2004, made the following comment in its editorial “Parmalat: Perennial
Lessons of European Scandal: Urgent need for better enforcement and investor scepticism:”
After the accounting scandals in the US, there was an unseemly amount of crowing in Europe. As it
happens, Parmalat is a much older scandal than Enron or WorldCom. It just took longer to come out at
the Italian dairy company. . . . Convergence of standards—in accounting, for instance—will help spread
best practice. So will high level meetings between regulators, such as take place within the International
Organisation of Securities Commission. But we are nowhere near having a world super-regulator. . . . In
Italy regulation has been weak because of fragmentation and lack of clout and resources. Attempts to
tackle this and to ensure regulators’ independence from political interference should be urgently pursued.”
(p. 12)
Required:
Discuss the lessons referred to above concerning the objectives of the current efforts at setting global standards for
accounting and financial reporting.
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ACC307 International Accounting MNU Business School