Stella Fearnley, Professor of Accounting at BU, and Shyam Sunder, James L. Frank Professor of Accounting, Economics, and Finance at Yale School of Management, recently published their views on global accounting rules in the Financial Times financial markets online edition. The article outlines the authors’ concerns that the application of uniform financial processes or rules in diverse societies, such as the introduction of the euro and the adoption of International Financial Reporting Standards (IFRS), does not yield uniform outcomes. They urge the Securities and Exchange Commission to abandon any plans to proceed with IFRS in the US, and encourage other countries that already employ IFRS to insist on a much less complex system.
Ultimately, the authors suggest the G20 drop its support for global accounting standards and recommend a system of accounting based on professional judgments and sound, prudent principles. At the end of the day, Anglo-American based accounting standards are not necessarily appropriate for the whole world.
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