Widespread IFRS adoption does not only have benefits but also costs. Sunder (2009) concludes, for example: “By their nature, evolved social norms and culture are specific to the society they serve […] Random chance and history also play a role. Attempts to harmonize financial reporting across the world assume that all cross-country variation in financial reporting practices is random or at least that the advantages of dispensing with such variations exceed any reduction in the fit between the local economic environments and the financial reports. The practices proposed for universal use are those prevalent in the English-speaking countries, and their authoritative versions written down in English often have no exact equivalents in Chinese, Japanese, or even Italian and German.”

[Sunder, S. (2009). IFRS and the accounting consensus, Accounting Horizons 23(1): 109]

REQUIRED: (i) Explain which costs of IFRS adoption the above quotation refers to. (ii) Identify and explain other costs of adopting IFRS. You can, but do not have to, discuss other arguments put forward in Sunder (2009).

Answer rating: 100% (QA)

i International Financial Reporting Standards IFRS require that an entity report its actual costs in... View the full answer