Which of these is a disadvantage of a country adopting international accounting standards compared with the country developing its own standards?
A) It will reduce the comparability of different countries' financial reports.
B) International standards by their nature must be general and involve compromises.
C) It will increase accounting and reporting costs for multinational companies.
D) All are disadvantages.

Question

Quizplus · Accepted Answer

International standards are generalized and involve compromises, whereas domestic standards can be tailored to the specific needs of the country's economy and financial reporting environment. However, adopting international standards can also have advantages such as improving the comparability of financial reports across different countries and enhancing the credibility of a country's financial reporting. C is incorrect because it may actually reduce accounting and reporting costs for multinational companies if they only need to comply with one set of standards rather than multiple sets of domestic standards. D is also incorrect because not all the options are disadvantages.

Which of These Is a Disadvantage of a Country Adopting