Path to Global Accounting Convergence

Increasing globalization of economical enterprises activities, as well as internationalization of financial markets has increased the need to harmonize accounting standards. It is not appropriate for these markets to have diversity of standards, according to which financial statements on accounting basis are prepared and introduced, for the diversity makes it difficult for financial analysis and as a consequence, it causes difficulty in assessing performances and financial positions of different enterprises, whom titles are shown in a given market. For investors, capital shareholders, lenders, suppliers and also employees and the general public, this diversity is considered as an obstacle for decision-making, especially for those related to the delivery of economical sources in different enterprises. Concerning the above, EU issued Directives IV, related to annual accounts, where there are included accounting balance, statement and profit, as well as notes on charge accounts. These documents are part of the whole and they must be designed clearly and in accordance with the recommendations of Directives IV, in order to provide a full and accurate view of activities, obligations, capitals and profiting or losses of companies in the period they part of. While, under the perspective of Directives VII, thememeber states of EU make any enterprise, under their jurisdiction, stand before obligations, in order to prepare consolidated accounts and a solid report of direction, where each case the accounts of mother or daughter companies shall be consolidated near mother companies, besides the location of daughter companies. On the other hand, lacking planned information according to same standards, the market cannot function effectively and reliably. Thus, this is a basic argument for the need and benefits of different enterprises, whatever their place of origin is, they shall supply intruders in the capital markets with reports or financial statements prepared and introduced according to the same accounting standards. If there is more pressure on investors and lenders have a better protection when they are given financial information prepared according to high quality standards and which normally ensure transparence and reliability, then it is known why main international bodies, since a long time, they have urged all countries to implement the new standards of accounting, on basis of compliance with international ones.