Pros and Cons of Adopting Ifrs in the U.S.

309 Words2 Pages
This section would focus on the possible benefits of adopting IFRS in the U.S. to investors, public companies, and auditors. Investors, being one of the users of the financial statements, would experience a significant benefit of being able to compare the reports with many companies all over world before making any investment decision. U.S. based multinational public companies would save the cost of modifying the reports according to international standards every year to make the information comparable with their companies all over the world. Only the auditors of the international auditing firms would benefit from the transition because then the auditors have to go through the reports based on only one standard. This section would focus on the possible cons of adopting IFRS in the U.S. faced by the same group of people discussed above. The auditors will have to make changes to the reports from the previous years for the comparative purposes. The public companies would have to bear a heavy monetary cost of transition from the U.S. GAAP standards to IFRS. It may affect the prices of the stocks of these companies, which in turn would be faced by the investors. This can affect the growth of the company. By adopting IFRS, U.S. will also be adopting a big risk, if the quality of the new standards do not match the U.S. GAAP. Looking at the various possibilities of adopting IFRS in the U.S, it can be said that it is a big decision to be made. Although, in my opinion we should adopt to IFRS in financial reporting only if the benefits outweigh the costs of transition. If adopting IFRS benefit monetarily and make the transition easy for the investors, auditors, and the public companies, then there should be no harm in accepting it for financial reporting
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