International Financial Reporting Standards Research Paper

International Financial Reporting Standards - Research Paper Example Adoption of International Financial Reporting Standards and efforts to converge United States GAAP and Global Standards will provide a framework for conformity of global financial reporting principles (Ernst & Young 15). The international financial reporting standards will enhance the comparability of corporations internationally. The new system will provide investors and shareholders with better monetary information of various organizations. The new system will assist investors to acquire dependable information of firms with international operations. Investors need firms’ details, which are more dependable, timely, pertinent and comparable across economies (Needles & Powers 48). As an investor or user of financial reports, the new system will reduce the costs I incur while investing and will increase the quality of information I receive. As an investor, my investment confidence will increase as a result of superior transparency among diverse companies’ monetary reports . This will increase my willingness to purchase the company’s securities. The new system will enable me to compare and interpret monetary information of different companies around the globe. This comparability will assist me in allocating assets in my investment portfolio. The comparability of monetary reports of various firms around the globe will increase trade in the international capital markets. The outcome will be an integrated global capital markets and simplified cross boundary investment. In the long term, there will be an enhanced liquidity in the financial markets and the cost of finances will reduce. The foreign capital inflows will increase since the companies will have access to global financial markets. The increase in foreign capital flows and reduction in cost of finances will stimulate investments within the country. Increase in investments will increase the productivity of the economy, and this would result to economic growth and development (Shamrock 65). Economic development will benefit me by augmenting the standard of living of the citizens. As a borrower, I will benefit from the low cost of credit, thus enabling me to finance my investment projects. The new system will reduce the costs of financial reporting, since companies with global operations will prepare monetary reports using a single standard. Multinational Corporations may save a significant amount of cash through circumventing the costs of translating their financial declarations into numerous local financial exposure principles (Shamrock 68). Reduction in costs of monetary reporting may result to low prices of services or products provided by firms, and as a consumer, I will benefit from the low prices. Walton notes that the new system will enable multinational corporations to analyze their competitiveness in local and worldwide markets. This will increase competition between these multinational corporations. Increase in competition will enhance the quality of services and goods provided by these firms. In order to acquire a competitive benefit, these firms may services and products as cheaper prices (Walton 87). As a consumer, I will gain from high quality of services and product and low prices. Monetary reports compiled using a single set of accounting standards help investors in evaluating various investment opportunities. Evaluation of financial repor