Question
A reason often cited for the move toward common financial reporting standards such as IFRS is that it can result in a lower cost for
A reason often cited for the move toward common financial reporting standards such as IFRS is that it can result in a lower cost for the business that follow them. Why might this be.?
A-IFRS is less complex that many national accounting systems and requires lower level of disclosure in relation to national regulations, This reduces corporate compliance costs and increase profit, thereby providing a greater return for shareholders
B-The introduction of IFRS by companies usually results in an improved control environment within the company, As a consequence the probability of default diminishes and lenders are able to reduce the cost of debt finance
C-Companies adopt IFRS as typically larger multinationals and thereby have access to a greater range of financial options, enabling them to reduce there cost of financing.
D-IFRS usually provides greater level of disclosure than national accounting practices and enhances comparability for investors, This reduces the perceived risk to investors who thereby require a lower return on there investment.
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