Regulatory, Cultural and Ethical Dimensions to the Introduction of Essay

Regulatory, Cultural and Ethical Dimensions to the Introduction of International Accounting Standards - Essay Example According to the research findings companies are often placed under regulations with respect to international accounting standards to enable the accounting professionals to provide an honest and accurate financial image to company’s stakeholders. Through compliance with international accounting standards regulations, companies are bound to benefit from their investors’ confidence with regards to truthful and accurate reporting of the financial situation and performance of the company. More so, compliance to such standards would render financial information more understandable, reliable, comparable, and relevant among the users of financial information in assessing confidence in company management and making economic decisions. Regulatory dimensions of international accounting standards are subject to a two tier endorsement mechanism standards a technical and regulatory level. The regulatory level endorsement mechanism is based on proposals of local accounting commission s that decide on the levels and whether the International Accounting Standards are to be adopted. Local regulatory bodies aim to ensure that full accountability and transparency is achieved in financial reporting through both local regulations and compliance to International Accounting Standards. Countries and regions such as the European Union have enforced compliance regulations among its publicly listed companies to apply International Accounting Standards in preparation of their financial statements. ... The regulatory level endorsement mechanism is based on proposals of local accounting commissions that decide on the levels and whether the International Accounting Standards are to be adopted. Local regulatory bodies aim to ensure that full accountability and transparency is achieved in financial reporting through both local regulations and compliance to International Accounting Standards. Countries and regions such as the European Union have enforced compliance regulations among its publicly listed companies to apply International Accounting Standards in preparation of their financial statements. This is in a bid to improve transparency and foster efficiency in corporate functions in the interest of the public and more particularly, investors (Palea, 2006, p.7). On the other hand, technical level endorsement mechanism uses Accounting Technical Committees and advisory bodies made up of accounting professionals and experts from both public and private sectors. These professional accou ntants committees and advisory bodies seek to provide expertise and support that is needed to assess International Accounting Standards and to advise companies on whether or not it is suitable for them to adopt the standards according to local and country preferences and interests. However, there exist Generally Accepted Accounting Principles that encompass a wide spectrum of local and geographically dispersed accounting interests and preferences all over the world. The GAAP is a common set of accounting standards, principles and procedures that are globally applicable by companies in compiling their financial statements. More so, GAAP include a combination of commonly accepted practices and local board authoritative policies and standards of reporting