IFRS: Beyond the Standards
The article has the purpose of accentuate the importance that there are two main factors which obstruct the correct understanding of the IFRS, even in countries where have taken the same version. These factors are the nation's culture and the rendering of the norms in different languages.
Firstly, regarding to cultural values, there are two reasons that generate different points of view for accountants. They are secrecy and conservatism. Secrecy refers to a preference for confidentiality and applying it to accounting terms is the preference to maintain available business information only for managers or finance responsible. Meanwhile, Conservatism is relative to the preference for a cautious approach because this kind of persons prefer to uncertainty avoid.
These cultural features impact on the elaboration of Financial Reports which probably show some different calculation because of the conservatism approach or different presented information due to the secrecy. With this reality it is very difficult to compare Financial Reports of countries even if they have the same IFRS version implemented.
As an alternative, multinational companies and worldwide auditor associations must capacitate and orientate their employees about cultural differences among different countries where they have presence or those with whom they have business relationships. That could help accountants and managers to understand different point of view from foreigner colleagues and what they want to express in some documents or financial reports according to their social values. Similarly, with understanding the cultural difference, these professionals may adapt their criteria with the objective to standardize their ideas and seek to be comprehended for other fellow workers in different places around the globe.
Secondly, the translation of the IFRS norms is the other difficulty to apply the correct and same standard among countries. Because of accounting...