WHAT ARE THE BENEFIT AND
LIMITATIONS OF THE
INTERNATIONAL ACCOUNTING
STANDARDS FOR DEVELOPING
COUNTRIES
Class I
Caroline 25360396

OUTLINE
Background
Position
Benefits
Limitations
Conclusion

BACKGROUND
 What is IAS ?

POSITION
 For the developing countries,

adopting the IAS has both benefits and limitations.

Financial language Accountants

Economic growth BENEFITS

1.ECONOMIC GROWTH

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
ACCOUNTANTS
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
AMONG COUNTRIES
 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

LIMITATIONS
 1. lack of flexible of accounting standards
 The IAS should be adapted to its local environmental

conditions.
 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

LIMITATIONS
 2. lack of well-established accounting

system
 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.

CONCLUSION

REFERENCE
 Alijifri, K.,& Khasharmeh, H. (2006). An investigation into the suitability of the international

accounting standards to the United Arab Emirates environment. International Business Review,
15(5), 505-526.

 Cai, F., & Wong, H. (2010). The effects of IFRS adoption on global capital market integration.

International business & economic research journal, 9(10), 25-34.

 Chamisa, E., (2000). The