EFFECT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) ON VARIATIONS IN ACCOUNTING REGULATIONS AND PRACTICES AMONG COUNTRIES IN THE WORLD: ISSUES AND CHALLENGES

Abstract

This study examined the effect of International Financial Reporting Standards (IFRS) on variation in accounting regulations and practices: Issues and Challenges. The research is aimed at harmonizing the accounting practice by regulating the financial reporting standards being used by European companies, American companies and other countries in the world. This is done by measuring the degree which different companies in the world uses International Financial Reporting Standards in reporting their assets. The objective of the study is to demonstrate the existence of harmonizing tendencies between European Union member states and other countries in the world, as a result of International Reporting Standards(IFRS) adoption. The methodology used involved the Index computation for a sample of 51listed companies that develop their activity in five European countries. The study revealed that the influence of International Financial Reporting Standards on accounting practices, as evidenced by high harmonization level for assets cannot be overstressed. Finally, many of the analysed situation srecorded maximum harmonizing values at least in visible tendencies. The study concluded thatIFRS has gone along way in unifying accounting practice in the world.