The issues and perceived obstacles associated with moving toward internationally
accepted principles must be weighed against the perceived benefits of harmonization.
The most significant benefit will be enhanced financial comparability. The diverse
multinational users of the financial statements will have a better understanding of
statements, and a harmonized approach will ostensibly provide more useful informa-
tion to them. A better understanding of foreign companies could lead to more stable
and efficient international stock markets and more international business activity,
which could stimulate all foreign economies.
12.10 CONCLUSION. As discussed previously, the diversity in accounting princi-
ples worldwide is significant. Important progress is being made within Europe and in
other countries that are moving to embrace IFRSs by 2005, and these efforts are
being closely supported by the SEC and the FASB. But while progress is being made,
it needs to be recognized that deciding what financial information is relevant and
should be reported in the current environment is difficult. Volatile and unpredictable
markets will continue to challenge management, to destroy value, and to cause fi-
nancial performance measurement and reporting issues. There has never been a
stronger signal that the markets need a credible body of global GAAP that provides
for the reporting of relevant and reliable information.
SOURCES AND SUGGESTED REFERENCES
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PricewaterhouseCooper. GAAP 2001: A Survey of National Accounting Rules Benchmarked
against International Accounting Standards.
Back, Christopher L. U.S. International Transactions, Fourth Quarter and Year 2001. Bureau
of Economic Analysis, April 2002
Breeden, Richard C. Fordham International Law Journal: Foreign Companies and U.S. Se-
curities Markets in a Time of Economic Transformation. New York: Fordham University
School of Law, 1994.
China Securities Regulatory Commissions, Statistics, 2001.
Choi, Frederick, Carol Frost, and Gary Meek. International Accounting.Upper Saddle River,
NJ: Prentice Hall, 2002.
Cochrane, James L. Fordham International Law Journal: Are U.S. Regulatory Requirements
for Foreign Firms Appropriate?New York: Fordham University School of Law, 1994.
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Paris, September 22, 1995.
DiPiazza Jr., Samuel A., and Robert G. Eccles. Building Public Trust. New York: John Wiley
& Sons, 2002.
Gebhardt, Gunther. “The Evolution of Global Standards in Accounting.” In Robert E. Litan
and Anthony M. Santomero (eds.), Brookings-Wharton Papers on Financial Services 2000.
Washington, DC: Brookings Institution, 2000, pp. 341–376.
Harris, Trevor S. International versus U.S.-GAAP Reporting: Empirical Evidence Based on
Case Studies.Mason, Ohio: Southwestern College Publishing, 1995.
Herdman, Robert K. Chief Accountant, U.S. Securities & Exchange Commission. “Moving
Toward the Globalization of Accounting Standards.” Speech at the Schmalenback Institute for
Business Administration Conference, April 18, 2002, Cologne, Germany.
Hertig, Gerard. “Regulatory Competition for EU Financial Services.” In Daniel C. Estery and
Damien Geradin, (eds.), Regulatory Competition and Economic Integration: Comparative
Perspectives.Oxford: Oxford University Press, 2001, pp. 218–240.
12 • 32 SUMMARY OF ACCOUNTING PRINCIPLE DIFFERENCES