In 2001 the International Accounting Standards Body was set up for the purpose of developing and improving the standards of international financial reporting. This essay is focused on examining the extent to which the adoption of these standards have improved the harmonisation of financial reporting in the EU.
The EU 4th and 7th directives have incorporated the
international financial reporting standards “into EU
standards” (Flowers 2002: 273) and, as Nobes and Parker
(2006: 10) report, “from 2005 UK listed companies must use
IFRS for their consolidated statements.” In theory, this
should provide the investor with the clarity of comparison
intended within the ISAB standards.