The issues of harmonisation of financial accounting versus variability of management accounting, and its implications on shareholders

IntroductionAccounting system is developed into two form, financial be and trouble accounting. Both have diametrical focuses and perspectives to facilitate contrasting users? training need. This paper explores the issues for these two approaches: harmonisation of financial accounting and disagreement of management accounting. Finally, we discussed its implications for organisation?s current or incoming shareholders.

Harmonisation of Financial AccountingFinancial accounting provides information to external users much(prenominal) as shareholders, creditors and regulatory agencies etc for making economic decision. Information has to be reliable, understandable and easily accessible for today?s general users. Harmonisation would allege to narrow national differences in accounting standard and, facilitates the comprehension and reliable comparison of financial reports from different countries (Rodrigues and Craig, 2007; Saudagaran and Diga, 1998). Multinational Companies (MNC) could reduce the compliance cost through suspending preparing different hard-boileds of financial reports when listing on foreign capital markets (Rodrigues and Craig, 2007; S. Henderson et al., 2006; Saudagaran and Diga, 1998).

The racy quality is another benefit of International Accounting Standards (IAS). Saudagaran and Diga (1997) engraft that IAS are seems to be more flexible and neutral than approximately domestic financial accounting standards. Coopers and Lybrand (1995) concluded that IAS did not let out materials differences on reconciliations of IAS to US GAAP.



In addition, standardisation will avoid duplicative costs of national and international standards (Ampofo and Sellani, 2005). R&D costs associated with adopting IAS are minimal, as result cost nest egg for ASEAN in formulating relevant and acceptable financial accounting standards (Saudagaran and Diga, 1997). This overly benefit to developing countries who unable to afford the cost of topical anaesthetic GAAP.

However, social and cultural differences will provoke different readings and interpretations of IAS, which may lead to different accounting practices within a province (Rodrigues and Craig, 2007). The application of different accounting systems to a common set of...

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