Submitted by: Ravindra Patel Submitted to : Prof.

David Mc Quirk Date : March 25, 2010 Chapter # 3 Topic: Harmonization HARMONIZATION The word harmonization means different to different people. For some its like standardization. Its refers to the reduction of alternatives while retaining a high degree of flexibility in accounting practices Harmonization in accounting can be used by many of the sectors such as academicians, accounting associations, implementers and investors; such usage arises from obligations. As in the case of other fields, the integration experienced in the field of economy has removed the borders between the economies of the countries and they became dependent on each other. Globalization in the field of economy has made it necessary to compare the financial data not only at the national level but also at the international level, that is to say that it has been a requisite to harmonize the accounting applications. The increase in the number of the international operations and the developments in the international capital markets have accelerated the process. The fundamental field on which harmonization in accounting practices is concentrated, is the accounting standards. In the recent years, the accounting standards have attained great importance. On one hand the organizations make every effort to harmonize their standards with each other, on the other hand the countries make necessary adjustments for harmonization to international standards. Harmonization in accounting standards has following benefits: -It decrease the costs of data collection -It increase in the comparison of the information, -It helps in development of the capital markets, -It facilitate in the fund movements - Provision of competition advantage in favor of the firms - Decrease in the audit costs and increase in the efficiency of the audit. The necessity for the harmonization in accounting applications has paved the way for the studies conducted by the international organizations to provide harmonization both locally and internationally.