International Financial Reporting Standards and their importance for romanian companies

Author:Andreea MANOLE, KPMG

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Keywords:International Financial Reporting Standards, Transparency, Comparability, Global Standards

Abstract:
In today’s globalize world, it is becoming more and more important for companies to apply consistent standards of quality financial reporting, which can be understood worldwide. Investors need to be able to discern easily how a company is performing and to compare its results not only with the local market, but also with those în other countries. în many countries is a legal requirement for listed companies to be audited under IFRS.\r\n\r\nThe need for a global standard has become far more important în view of globalization, and the fact that the level of cross border trade and transactions has grown exponentially since IAS was created. \r\nThe Romanian authorities also require companies to continue reporting under Romanian accounting standards în many cases as well as IFRS.\r\n\r\nThe introduction of IFRS has been a major change to financial reporting worldwide. Inevitably, implementing it has caused some extra work for companies and state regulatory authorities în the short term, as well as some additional costs. However, în today’s global economy, and particularly within the European Union, it is essential to move to IFRS, and those companies which do so sooner will be în a stronger competitive position. The time and costs involved în implementing the standard should consequently be seen as an investment în the future of the company, which în the long term will lead to higher profits, and greater opportunities for expansion of operations. A professional auditor can help a company minimize the complications of implementing IFRS. \r\n\r\nImplementing IFRS is essential for Romanian companies, which will give them far greater opportunities for development în the long term.

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