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International Accounting - Difficulties in Securing Relevant Financial Information

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Financial statements are supposed to give an insight into the company’ s ‘ capital adequacy, asset quality, earnings and liquidity’ (Davis et al. , 2000). According to Davis et al (2000), the sources of financial information are principally from three major categories that can be accessed online or from printed reports. This includes: Information obtained from financial statements – this is usually made available to the public through periodic issuances of accounting reports, either quarterly, semi-annually or annually. Data collected by the supervisory entities in the particular industry or accounting collective body that monitors the observance of the regulatory and industry standards both nationally and internationally.

These include accounting bodies, professional marketing associations or legally set bodies for either specific industry or state. Data obtained from agencies that may have profiled the particular companies in a specific study or academic research. This includes agencies retained to study the industry or certain firms or products including research firms or academic institutions. Data from such domains is normally the most comprehensive as it encompasses properly researched material covering the whole sector. Difficulties in Securing Relevant Financial Information Lack of Standardisation The main hindrance encountered by MNCs seeking financial information of foreign rivals in overseas markets is lack of conformity in reporting standards in the published statements.

In an international framework, the firm considers the geographic scope of the industry in regards to the critical aspects that influence the envisioned industry on a global basis while analysing the current and prospective adeptness of the firm (Sykes et al. , 2001). Nevertheless, with many countries adopting the International Financial Reporting Standards (IFRS) standards including now the US, this problem will gradually ease as the standards gain conformity globally.    

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