What is the best short-term solution to alleviate problems of financial statement analysis arising from international differences in accounting terminology?
A)Require all countries to conform to IASB standards.
B)Create standard financial statement terminology for all companies around the world.
C)Analysts should carefully read the notes to financial statements and learn about the business environments of countries they analyze.
D)Convert all financial statements into English.

Question

Quizplus · Accepted Answer

While requiring all countries to conform to IASB standards or creating standard terminology may be ideal in the long-term, it may not be feasible in the short-term. Converting all financial statements into English may help to some extent, but it may not fully address all the differences in accounting terminology. Therefore, the best short-term solution would be for analysts to carefully read the notes to financial statements and learn about the business environments of countries they analyze, which would help them to better understand the context and nuances of the financial statements.

What Is the Best Short-Term Solution to Alleviate Problems of Financial