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Essay / Research Paper Abstract
This 3 page paper considers how and why the use of international accounting standards may increase confidence of investors and add to the credibility of the accounts in the post Enron and WorldCom accounts environment. The bibliography cites 5 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEinteracc.rtf
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Unformatted sample text from the term paper:
an investment. Although not used in isolation, they are a primary source of information. For investors to make an investment there is the need to have trust in the annual
accents. It is for this purpose many systems of auditing were developed, to ensure that audited accounts gave a true and fair picture of the companys accounts for that year
(Elliott and Elliott, 1998). The accounting system in any country will often have a range of choices that can be made, such as stock valuations, with first in first
out, fair market value and even last in first out. The companies will have a choice, although the latter option may not be available in some countries. Therefore, even in
a single country there are choices. When it is considered the level of flexibility internationally there are a range of standards, and this makes it difficult for an investor, if
a key factor of investment is to make sure they understand the accounts. Comparing company performance between and UK or US company and one in China requires more than just
comparing the figures. This is why international standards have been introduced. Where a company is using international standards it is easier for them to obtain international investment, not only de
to increased understanding of the accounts, but also as a result of the creation of creditability that complying with international accounting standards provides. The level of trust placed
in accountants and auditors ahs been high. Some incidents such as Barings Bank and PolyPeck all indicated that there were gaps (Jennings, 1995), but the real fears hit the market
with the failure of Enron and then WorldCom. There were cases where accounts were clearly and purposefully misstated and shareholders were mislead. In both instances the auditors did not pick
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