Harmonisation of Accounting Standards Essay Example | Topics and Well Written Essays - 1500 words

Harmonisation of Accounting Standards - Essay Example They include UK GAAP, IAS, US GAAP etc. More positive, however, has been the improvements in recent times in terms of global convergence; this has convinced various stakeholders that there is still hope that harmonization can be achieved sooner rather than later. Local and international standard setting agencies have initiated harmonization projects that have largely been successful; it will therefore not be too long before a common set of standards guides and controls the accounting world. This will give the accounting profession an identity of legal discipline in its truest sense. This paper examines the issue of harmonization and other aspects that relate to it, for example challenges and advantages. Key Words accounting standards, harmonization of accounting standards. Introduction The harmonization of accounting standards has developed into a hot topic among accounting professionals all over the world (Black 2007, pg.26). Accounting standards can be defined as authoritative stat ements issued by acclaimed accountancy agencies that relate to different aspects of treatments, disclosures and measurements of accounting events and transactions, and that signify best accounting practices. ... For example, in the United Kingdom (UK) electrical and electronic engineers abide by the Institute of Electronic and Electrical Engineers’ (IEEE) standards and principles that define and shape their professional practices (Samir 2003, pg.20). Why, then, is it so difficult for accountants to have a common set of codes that create some uniformity in their line of work and their practices? Over the years, it has been widely acknowledged that the differences in existing standards in various countries have so often been greatly underestimated. As a result of this, achieving uniformity has been a herculean task of sorts; the first step towards failure is usually underestimating the gravity of a problem (Srkant 2005, pg.64). As a consequence, attention has shifted towards understanding the various accounting standards in existence and trying to address how they can be merged. Although it has been met with huge obstacles, results have been better than in previous attempts. History of Harmonization The concept of harmonizing accounting standards dates back to the 19th century when the notion of â€Å"International Accounting Standards† was put forward in the 1st International Congress of Accountants which was held in St. Louis in 1904. In 1957, at the 7th International Congress of Accountants in Amsterdam, Mr. Jacobkraayenhof discussed the need for international accounting standardization and cooperation. In 1966, talks were held among various professional bodies like the Association of the Institute of Certified Public Accountants of America, the Canadian Institute of Chartered Accountants and the Institute of Chartered Accountants of England and Wales (Siegel & Shim 2006, pg.33). The talks were led by the then President of the Institute of