... government, lenders, and others in making investment, credit, and business decisions. For example, proposed investors looking at financial statement of two companies can find it difficult to make a decision as to which company to invest in or not, especially if the companies are located in different countries of each other. However, as companies become larger, and mostly international, accounting practices and regulations became different across different countries and consistency became a very important issue. It became difficult to measure income and expenditure in the income statement, as well as measuring and recognising assets and liabilities in the balance sheet. If different accountants from different countries or even the same country are faced with the same transaction in which they are required to prepare financial statements, they will not draw up the same statement. Even if they all follow a set of rules and regulations, whether implicit or explicit, there is no format ...

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