THE IASB AT CROSSROADS

Introduction

The following provided answers further describe the features and challenges facing the adoption
and implementation of IASB in the world.

Explanation:
Question 1
Benefits of achieving convergence with IFRS

 Benefits the economy by enhancing its international business growth.

 More foreign capital flow to the country, when the international investors are encouraged
to invest.
 Financial statements prepared using common sets of accounting standards aid the investors'
in better understanding of investment opportunities.
 When financial statements comply with globally accepted accounting standards, the
industry can be able to convince and create confidence in the minds of foreign investors,
as such, raising capital from foreign markets at lower costs.
 The adoption of IFRS provides more opportunities for accounting professionals in every
part of the world if the same accounting practices exist worldwide.

Question 2
Substantial challenges to the growth of IFRS in the coming years include

 Understanding the meaning of international convergence. Without a universally adopted

definition of adoption it is difficult to measure progress towards international convergence.
 Translation of the international standards. Translators find it difficult to convey the real
meaning of the English text in the translated standards. As the adoption of IFRS is meant
to be global, varied languages and translation issues might pose a substantial challenge.
 Complexity and the structure of the international standards. Increasingly, international
standards are becoming longer, more nuanced and dependent on rules. The complicated
structures and complexity are adversely affecting IFRS adoption and implementation.

Question 3
Addressing these challenges

 In the case of understanding international convergence, IFAC can enhance this process
through greater clarification of the end results.
 In the case of translation difficulties, IFRS should adopt and establish a reliable platform
of translation process in order to facilitate high quality translations of international
standards
 In the case of complexity, the international standards setters should develop standards that
continue to be principled based, less complex text and a structure which is easy to
incorporate in national law.
Question 4
Should countries still adhere to the traditional accounting standard?

 Despite international accounting standards being considered as globally comparable and

promoting accountability and efficiency, traditional accounting standards should never be
assumed completely because at times international standards fall short due to complexity
and structural differences with national law requirements.

References:

Ramana, K. Misztal, K. Beyersdorfer, D. (May, 2011). The IASB at A Crossroad: The Future of
International Financial Reporting Standards. Harvard Business School. Retrieved from
https://app.schoology.com/assignment/3182321810/info

Wong, P. (2004). Challenges and Successes in Implementing International Standards: Achieving

Convergence to IFRS and ISAs. Retrieved
from; https://www.cimaglobal.com/Documents/ImportedDocuments/ifac_report_challengesucce
ss_111004.pdf