Worldwide Adoption of IFRS: Impact on Financial Statement

Hello classmates & Dr. K, Would the worldwide adoption of IFRS result in worldwide comparability of financial statements? Why or why not? The arguments for convergence vary from a necessity for the globalization of capital markets, reducing financial reporting costs, and simplifying auditing. "National differences in corporate reporting cause a loss of investor confidence, which affects the availability and cost of capital (Doupnik et al., 2020, p.78)". The transferability of accounting staff in multinational companies, and the increased quality level of accounting practices internationally, are also arguments for worldwide convergence to IFRS. The argument against the convergence of IFRS is the belief that it is unnecessary to force all companies worldwide to follow one set of rules, having to comply with irrelevant standards (Doupnik et al., 2020). The need and want for universally accepted standards do not exist. The fact that countries have different environmental influences and differences in accounting is an appropriate and necessary reason for unique accounting systems. Worldwide comparability of financial statements will depend on the technical or actual comparability. The ability of IFRS to allow companies to choose between different standards or valuation methods, the achievement of comparability will not exist. Judgments based on cultural values applied differently cross-nationally can also be harmful due to biases. Therefore, I do not believe the worldwide adoption of IFRS would result in the comparability of financial statements.