Convergence of Accounting Standards

Convergence of Accounting Standards
[Name]
[Institution]
[Date]
Convergence of Accounting Standards
To ensure professionalism in accounting, there must be a set of standards to be adhered to in executing various transactions. Globally, there is a stream of various accounting standards in different countries, which include the US GAAP, IAS, UK GAAP, and many others. However, to ensure uniformity in carrying out various transactions, it is important to have convergence of accounting standards. Though various initiatives have been taken to reduce these streams into a single set of financial accounting standards, a lot needs to be done to ensure convergence of all accounting standards globally (FASB, Financial Accounting Standards Board, n.d.).
With the rapidly growing international trade, internationalization of companies, and emergence of new communication technology in the international market, various businesses are in much need of a common accounting language that will prevail worldwide. Adoption of same accounting standards will also attract investors to various countries, since firms will be able to carry out their operations without any restricting accounting standard. In addition, with the current streams of accounting standards, there is a high likelihood of a transaction yielding profit in one accounting standard and loss in another. Therefore, uniform accounting standards will help different businesses to market their goods in various countries without the fear of losing profits. Currently, many companies are shutting down because of bad accounting practices. This problem can only be eliminated by adoption of a global set ...