In some countries, giving and taking of gifts before or after a business deal is allowed. These gifts could be in the form of tangible assets or money. In contrast, this practice is outlawed in other countries as it is considered a case of bribery. Thus, international accounting standards provide a harmonious code of ethics, which becomes more vital during conflict resolution among companies.
In addition, they vastly increase the volume of trade. Before the advent of these universal rules, it was a cumbersome job of getting translations from the various reports in many countries. There was also the risk of misinterpretation stemming from the fact that different countries adopted different accounting practices hence causing confusion to other business partners. A lot of valuable time was also lost in seeking clarifications of issues. Nevertheless, with these rules firmly in place, matters have been simplified and there is a common language at use. The formulas too have been agreed upon and are well known so it is much easier to interpret and understand a company's profitability (PriceWaterHouseCoopers 2007, p.4).
Job creation is yet another benefit accrued from these standards. The teams of experts hired to help in constructing the text that will eventually be published are well paid. In fact, as more and more companies seek to expand to other foreign markets, the more they require personnel with the relevant skills, experience and knowledge of international business practices. These people have formed international accounting consultancies from where they advice companies on prudent financial use and reporting in order for them not to contravene the conditions required in their International Standards Organization certifications. Entrepreneurship has thus been enhanced.
Similarly, the use of international accounting standards has significantly reduced the cost of expenditure for very large conglomerates that have offices in several countries.
