International Financial Reporting Standards (IFRS) are set to become the global accounting language. Empirical evidence suggests, however, that IFRS adoption alone will not lead to global convergence of reporting practices, and will not make comparing companies’ financial statements as easy as many have hoped. True convergence in reporting practices would require a much broader convergence of countries’ institutional frameworks, which is unrealistic in the future and probably not even desirable. I therefore propose a different way forward: to create a “Global Player Segment” in which firms would use the same reporting rules (ie, IFRS), face the same enforcement mechanisms, and have similar incentives for transparent reporting.
Read GPS Proposal>
For more background, see related research paper>
On April 26th, 2010, the Shadow Financial Regulatory Committee issued a statement proposing such a Global Segment.
