Business, Management and Accounting
4 years ago

Global Financial Markets Soar with Accounting Standards Harmonization

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SSRN Electronic Journal
Accounting Standards Harmonization and Financial Integration
Dan S. Dhaliwal, Wen He, Li Yan, Raynolde Pereira

Paper Summary

Adopting the same accounting rules worldwide helps financial markets work better together. When countries switch to International Financial Reporting Standards (IFRS), local stock prices react faster to global news. This effect is stronger in places where accounting rules become more similar and for companies with more foreign investors. In short, having the same accounting standards makes global financial markets work more smoothly.

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