LIMITATIONS OF THE
STANDARDS FOR DEVELOPING
What is IAS ?
For the developing countries,
adopting the IAS has both benefits and limitations.
Financial language Accountants
Economic growth BENEFITS
Assure the useful and meaningfu l decisions
Compare the financial results of companies and the decisions of investment Attract the investment through greater transparency ECONOMIC GROWTH
THROUGH THE INTERNATIONAL TRADE
Increase the rate of international trade economic growth
Reduce the trade barrier between countries
EDUCATION LEVEL OF
Help the countries to adapt the IAS
Education is the decisive factor that is more adaptable and flexible to adopt the IAS
High qualified accountants and well-trained users exercise professional judgment because the developing countries need them to apply the
IAS for the government or the companies
UNIFY THE FINANCIAL LANGUAGE
Adopting the IAS strengthens the communication
among developing countries because they use the unified standards in accounting.
=> understand each other easier because they use the same accounting principles.
1. only use the IAS to cooperate
=> example: companies want to provide the information that might assist an international audience, they need to translate their financial statements into foreign language
1. lack of flexible of accounting standards
The IAS should be adapted to its local environmental
Some developed countries made the standards which are only beneficial for their countries.
Example: on of the main problem of the adoption the
IAS is that the lack of IAS for major sectors of the
Bangladeshi economy including tea, oil and gas sectors. But there is no IAS for these sectors
2. lack of well-established accounting
The government should make the policies to
strengthen implement mechanisms.
For example: In Pakistan, adopting the IAS can be summarized as lack of enforcement to implement, the government has no effective enforcement to implement, because of the economic and political system cannot support as a good condition.
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