However the IFRS has enforced other rules that counter the flexibility of others. In the case of costing inventory though the firm has three options to choose from under the IFRS (IAS 2.26)”an entity must use the same cost formula for all inventories having a similar nature and use to the entity. That is, a multinational company must use a consistent inventory policy election for each class of inventory in all of its worldwide subsidiaries”. Furthermore other accounting systems like the US GAAP allow an additional method of costing inventory (last in last out), which creates even more flexibility and also do not provide any rules like IAS 2.26 to counter such flexibility.
Another important point is that certain firms may employ creative accounting to take advantage of the subjective component as well as the flexibility provided by the IFRS to manipulate certain financial information. This produces non uniform financial reporting, however the use of auditors can be used to hinder this aspect as auditors will present a non bias report of the financial data.
In conclusion uniform accounting standards in the context of the IFRS do, to a certain extent, produce uniform financial reporting as they specify the accounting methods used to interpret business transactions, which lead to agreement on how commercial transactions are to be accounted. However in some cases these rules involve a subjective component, which can lead