In my most recent article on Ghana`s adoption of IFRS (see 25th July Issue of BFT, page 5), I did indicate that there are enormous benefits regarding the adoption of IFRS. Although the International Accounting Standards Board, the self-acclaimed global standard setter, has received wide spread criticisms about the development of a single set of accounting standard across the globe, one thing critics all agree on is that, there is the need for the provision of high international accounting quality for users. For example, imagine an investor from Qatar is considering investing in Ghana and has no idea how financial statements are prepared and with what standards they are prepared with. It is difficult for this investor to make financial and investment decisions based on local or regional accounting standards. Hence the move towards IFRS has been largely greeted as a sign of making cross border investments and capital allocation easier. However, many African countries have been unable to document these benefits of adopting IFRS owning to the fact that, these standards were developed in the West and for that matter, with a view of solving western problems. In a sense, this argument may sound plausible and in other context this may seem misplaced as it is generally believed that IFRSs are principle based standards and hence the use of judgment to fit the context within which it is used make sense. Reasons for which international difference in accounting standards are obvious, but for the sake of clarity, let me rather state the obvious. It’s been argued that the extent of economic development within a country plays a major role as to whether it will adopt international standards or develop its own standards. Thus-as countries become more ‘wealthy’ they tend to develop their own accounting standards (which can be costly, I will advance arguments as to why this may be the case). Less developed countries often adopt accounting standards issued by the IASC (which may, or may not actually be relevant to the information needs of the local people). Furthermore the nature of the domestic business ownership and financing systems can influence the accounting standards used within a country. For example, in countries which have companies that rely relatively more on equity capital (funds from many ‘outsiders’) there is a tendency to provide greater disclosures than in countries with companies that rely relatively more on debt capital. Another clear example of why international difference in accounting exits is colonial inheritance. Chances are, colonial inheritance or history of a country association with a colonial master will impact the accounting standards employed. A commonly mentioned reason for international differences in accounting is tied to the broad notion of ‘cultural difference’. Culture itself could be expected to influence other things, such as legal systems, tax systems, and how businesses are formed and financed, which will in turn influence the types of information demanded. A simple example will be the case of Islamic finance where the notion of charging interest on loans is unacceptable in the Arab world hence the reason for non-adoption of IFRS. Sources of aid or finance might also influence the accounting standards used. For example, an international funding organization (such as the World Bank, IMF) might require that particular accounting rules be used as a condition of providing funds to a country. Evidence point to the fact that the World Bank and the European Union continue to exert pressure on developing countries to adopt IFRS in order to qualify for funding and aid. Nevertheless organizations such as the IASB are either ignoring the literature which suggests that there is a need for different countries to adopt different accounting approaches (due to issues such as differences in culture, religion, financing systems, economic development and so forth) or they believe that the advantages that accrue as a result of harmonization of international standards out-weigh the need to consider cultural, religious and other differences. In many respects, wealthy countries turn to shy away from IFRS for reason of the loss of power to set their own accounting standards, whilst developing countries turn to adopt IFRS without any major changes. Some of the reasons for this may be attributable to the huge costs associated with the development of such standards, the edge to join the international harmonization train, to facilitate the growth of foreign direct investments, to enable the accounting professionals to emulate well established professional standards, conduct and ethics and finally to legitimize the status of a country as a full fledge member of the international community for example, the IFAC, i.e the International Federation of Accountants of which the Institute of Chartered Accountants Ghana has been a part since 90s . Having said this, a rich set of literature pioneered by Nobes and Paker, Peiera, Larson, Abu Rahaman all argue that there is little evidence that the claimed benefits of international standards to developing countries are quite obvious. In the recent annual report of the IASB, the outgoing chairman, Sir David Tweedie said that ``Europe’s experience of 25 sovereign nations, each with their own national accounting standards, simultaneously switching to IFRSs should offer some comfort to other jurisdictions concerned about their own transitional arrangements. Recent research has shown that, in addition to raising the quality of financial reporting across Europe, switching to IFRSs has delivered improvements in financial reporting even for those countries such as the United Kingdom with advanced financial reporting requirements. In the wake of Europe’s decision, Australia, Hong Kong, New Zealand and South Africa quickly moved to the adoption of IFRSs, followed in 2007 by China, which did not adopt on a ‘word for word’ basis but whose requirements are now very close to IFRSs. In 2008 Israel, 2009 Chile, and 2010 Brazil adopted IFRSs to be followed by a host of other countries in the next two years, namely, Canada, Korea, Malaysia, Mexico, Singapore and Taiwan. The tipping point is then achieved, and the world has in effect committed itself to global financial reporting standards.`` This seem suggest that, it doesn’t really matter any longer if the rest of the world moves to IFRS or not, as the world’s most powerful nations are now applying IFRS, or will soon require IFRS, it has come to stay as the global financial accounting language and hence, it was prudent that the Institute of Chartered Accountants Ghana made the frantic effort to adopt the International Financial Reporting Standards. In a more Ghanaian context, I provide below an extract of some differences between IFRS and the Ghana National Accounting Standards.