Universal Accounting Approach &Cross Border Investment Essay

Universal Accounting Approach &Cross Border Investment - Essay Example Without these accounting standards each and every business entity would have to develop their own accounting standards that would make the comparison of financial information of different business enterprises difficult. The interests of the financial activities of the individual and institutional investors have become global recognizable and there has been active involvement of various organizational bodies for the development of a widely accepted accounting framework beneficial to the investors. The existence of an efficient and liquid capital market can only be possible, if the investors are provided with transparent, relevant and reliable information. Introduction: Universal Accounting Approach &Cross Border Investment The corporate sector is facing certain complexities in terms of corporate governance and financial reporting and has also affected the US Capital markets. The current financial community is devoid of strong framework, which can integrate the systems altogether and d evelop a global financial reporting language. The silver lining in the current complexities would be the sudden and tremendous progress towards the achievement of a global financial reporting language. The development of a global financial reporting language would be the establishment of a strong financial framework, which will comply with the universal accounting standards and regulations. ... e International Accounting Standard Board (IASB) and International Accounting Standard Committee Board (IASC) has contributed significantly to the outcome of the organizations. These boards are endowed with activities and tasks for the development of accounting standards, which comply with the current accounting environment (Beck, Kunt and Levine, 2002). The study will lay emphasis on the accounting standards developed by leading organizations, associations and their contribution towards the betterment of the economy. The author of the study will also highlight the accounting techniques, significantly for the cross border and regional investments. Finally, the study will conclude with the summary of the existing environment market with the application of the accounting standards and tools. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) The IASB and FASB have been working in unification since the year 2002 and the two boards have co nverged their required tactics for the development of several accounting and investment projects. It is one of the non-profit organizations, whose primary purpose is to formulate certain accounting principles within the US region for the interest of the common people. It was established in the year 1973. The boards helped in establishing the accounting standards and regulations for educating the issuers, auditors, government and various other users. Some of the main objectives of the board would be to improve the utility of the financial reporting for the guidance of varied users, develop standards for the current business organizations, identify reports in the accounting process and promote international convergence of accounting standards in compliance with the quality of financial