Český finanční a účetní časopis 2015(3):7-23 | DOI: 10.18267/j.cfuc.447

Is a Full International Accounting Convergence Desirable?

David Procházka
Doc. Ing. David Procházka, Ph.D. - docent; Katedra finančního účetnictví a auditingu, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze; nám. W. Churchilla 4, 130 67 Praha 3; <prochazd@vse.cz>.

Referring to the Convergence Project of IASB and FASB, the paper focuses on an up-to-date issue, whether it is desirable to endeavour for a single global system of financial reporting standards. Albeit a full convergence is achievable both theoretically and practically, economic theory, analytical modelling and empirical accounting studies show that potential benefits of a single global system are lower than its costs. The main restriction on further convergence stems from the variety of informational needs by users of financial statements. To meet this changing demand, information strategies of preparers have to be flexible. One-size-fits-all approach to standard setting undermines the potential of standard setters to comply with the requirements both from users and companies. The quality of financial reporting standards can be only assured if standard setters are exposed to a competition.

Keywords: Accounting convergence; IFRS; US GAAP; Monopoly; Competition.
JEL classification: M41

Published: October 1, 2015  Show citation

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Procházka, D. (2015). Is a Full International Accounting Convergence Desirable? Czech Financial and Accounting Journal, 2015(3), 7-23. doi: 10.18267/j.cfuc.447
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