What were the reason for, waht are the clained advantages of, the Essay

What were the reason for, waht are the clained advantages of, the adoption in Australia of international financial reporting standards(IFRSs) - Essay Example This will be a more adaptive way of comparing financial information not just within Australian companies but the Australian corporate sector with the international corporations. along with comparison, it will also make the allocation of capital across borders more efficient. Furthermore, different arrays of national standards which are a lot different in their functionality, on its own places a high cost on capital markets. a constant portion of these costs is directly put on the companies who have to meet the multiple standards to raise capital in different markets. the IRFS bears the answer to provide relief for both corporate governance and the stakeholders (Antill & Lee, 2005). In today’s global world, economic relations with other countries are increasing at a much faster rate than before and especially for Australia where foreign trade is much more than the GDP. This has resulted in a substantial increase in the number of different multinational corporations out of Australia, and many of these companies have their focus on Asian markets among others for their revenues. Furthermore, as these economies themselves develop this makes it even more relevant for IFRS to be adopted in Australia (Nobes, 2006). In these global markets, the IFRS gives investors a more clear view of the companies as barriers to international financial investment have fallen in markets around the world. These investors can now trade securities of these Australian multinational companies without any constraints. Moreover, these investors may be pretty much responsible for trading of almost half of all the shares of the companies which are floated in the Australian market (Nobes, 2006). As cross-border financial investment increases, capital markets become more dependent on each other. This means that shocks felt in one market reverberate around