1.1 European Union (EU)
1958 - EU was formed following by the Treaty of Rome
Global trading has impacted the treaty to develop standards that support unrestricted market activities internationally. Uniformed accounting standards are required regionally to encourage the capital flow, enhance stakeholders’ protection, and increase the comparability and reliability of companies’ financial information (Donnelly, 2007).
and 1980- EU
foundation of Accounting
Harmonisation through company law
The purpose of EU is to construct the common business …show more content…
There is a demand in the IASC harmonisation efforts that the inconsistent nationally accounting policies have hindered the international flow of investment due to uncertainty when investors and creditors face in reading different financial reports in UK and Australia Companies (Parker and Morris,
2.4 Saving on cost and time
MNEs operating in various countries and having their shares quoted on several stock exchanges, must comply with the accounting standards applicable locally, it could make their financial reporting increasingly costly and difficult
Time and money could be economized in consolidation disaggregated financial data through harmonisation. MNEs and international auditing firms will be able to transfer their professional accountants and auditors conveniently across the national boundaries as it will be inexpensive to provide training for them (Diaconu and Coman, 2008).
The provision of low cost accounting standards and practices could be supplied to countries with limited resources. MNEs will be advantageous which have their subsidiaries in the ASEAN