ACCA Applied Knowledge · Financial Accounting · The regulatory framework
Which of the following is NOT a likely benefit of the international harmonisation of financial reporting standards through IFRS?
The claim that harmonisation completely eliminates professional judgement is not a benefit. IFRS improves cross-country comparability, eases group consolidation and boosts investor confidence, but standards are principles-based, so judgement is still needed for estimates and classifications.
- AEasier comparison of results of companies in different countries
- BLower cost of preparing consolidated accounts for multinational groups
- CComplete elimination of any need for professional judgement in preparing accountsCorrect
- DGreater confidence among cross-border investors
Explanation
Harmonisation improves comparability, reduces consolidation costs for groups using one framework, and aids cross-border investment. IFRS remain principles-based and still need judgement, for example on estimates, so judgement is not eliminated.
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