In an increasingly globalized and hyper competitive world, the need for accurate and dependable financial reporting would seem to go without saying. Yet, despite the fact that today's businesses and investors often operate with minimal hindrance from national boundaries, there are still significant differences in accounting practices specifically as they pertain to the treatment of financial statement items, across various countries. Global capital markets have been the catalyst for the need for harmonization in accounting practices. As Tyrrall (2005) notes, although the need is clearly present, even in a cohesive geographic region, such as the European Union, member states simply have not been willing to give up their national practices. On the other side of the pond, the U.S. Financial Accounting and Standards Board pursued its own project, with some assistance from the UK, Australia and New Zealand. However, government has realized that this separatist approach is not effective. As such, regulators and standard setters from a variety of countries have worked to harmonize reporting requirements (Tarca, 2004). In 2005, all EU member states agreed to impose International Financial Reporting Standards (IFRS) on listed consolidated financial reports. However, the degree of adjustment has varied across member states.
             Although Jamal, Maier and Sunder (2005) put forth that there appears to be a preference for legislated accounting standards, as opposed to natural evolution as a body of social conventions, during the latter half of the 20th century, it is more a driving need for cohesiveness and the inability for evolution to keep pace with this demand that has truly spurred legislative action. Despite the fact that thousands of companies currently adhere to the IFRS, around the world, more convergence is needed before a truly cohesive system is had, where financial reporting is not affected by national borders. These diffe...