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“Harmonization” is a process for improving the compatibility (suitability) accounting practices by setting limits on how large-prkatik practices may vary. Harmonization of standards will be free of conflicts of logic and can improve the comparability (comparability) of financial information from different countries. Efforts to harmonize accounting standards have been started long before the establishment of the International Accounting Standards Committee in 1973. International accounting harmonization is one of the most important issues faced by the makers of accounting standards, capital market regulators, stock exchanges, and those who prepare or use financial statements.


  1. Include the harmonization of accounting harmonization:
    Accounting standards (which relates to the measurement and disclosure)
  2. Disclosures made by public companies associated with the securities offering and listing on stock exchanges
  3. Standar audit


International Harmonization profit


A recent article also supports the existence of a “global GAAP” harmonized. Some of the benefits mentioned include:

  1.  Into global capital markets and investment capital can move across the globe without a hitch. High-quality financial reporting standards that are used consistently throughout the world will
  2. improve the efficiency of capital allocation.
  3.  Investors can make better investment decisions; portfolio will be more diverse and less financial risk.
  4. Companies can improve decision making strategies in the areas of mergers and acquisitions.
  5. The best ideas arising from the standard pat-making activity is spread in developing global
  6. standards of the highest quality.

On criticism of International Standards
Internationalization of accounting standards is also drawn criticism. In early 1971 (before the establishment of IASC), some argue that the determination of international standards is a very simple solution for complex problems. Also stated that the accounting, the social sciences, has had a flexibility that is built up by itself in it and the ability to adjust to a very different situation is one of its most important values. At the international standards of doubt can be flexible to overcome differences in background, tradition, and national economic environment, some people argue that this will be a challenge that is politically unacceptable to national sovereignty.
Furthermore, it feared that the adoption of international standards will lead to “excessive standards”. Companies must respond to the pressure composition of the national, political, social, and economic and increasingly made the MAGs to meet additional international regulations are complicated and costly.
Joint Reconciliation and Recognition
Two approaches are proposed as a possible solution is used to overcome the problems associated

with cross-border financial report:

  1.  Reconciliation

Through reconciliation, a foreign firm can prepare financial statements using accounting standards country of origin, but must provide a reconciliation between the accounting measures (such as net income and shareholders’ equity) in the country of origin and in countries where

financial statements are reported.

  1. Mutual recognition (which is also referred to as the “payoff” / reciprocity)
    Mutual recognition occurs when the regulator outside the country of origin to receive the financial statements of foreign companies which are based on the principles of country of origin.


The debate over harmonization may never be fully resolved. Several arguments against harmonizing contain some truth. However, growing evidence suggests that the goal of international harmonization of accounting, disclosure, and audit have been received so extensive that trend leading to the international harmonization will continue or even sooner. A large number of companies voluntarily adopting International Financial Prlaporan Standards (International Financial Reporting Standards-IFRS). Many countries have adopted IFRS as a whole, using IFRS as national standards or permit the application of IFRS. National differences in the underlying factors that lead to differences in accounting, disclosure and audit practices increasingly narrow as the capital markets and international products.
Application of International Standards
International accounting standards are used as a result of:


  1. International treaties or political
  2.  Voluntary compliance (or being pushed in a professional manner)
  3. Decision by the international accounting standards-making body

Some important events in the history of the International Accounting Standards Determination
1959 – Jacob Kraayenhof, a founding partner of a firm of independent accountants the main European, pushing for international accounting standards-making business began.
1961 – Group d’Etudes, composed of practicing professional accountants, established in Europe

to provide advice to the EU authorities in matters relating to accounting.
1966 – Accountants International Study Group was founded by a professional institute in Canada,

Britain and the United States.
1973 – International Accounting Standards Committee (International Accounting Standards

Committee, IASC) was established.
1976 – The Organization for Economic Cooperation and Development (Organization for

Economic Corporation and Development-OECD) issued a Declaration Investing in

Multinationals, which contains guidelines for the “Disclosure Information”.
1977 – International Federation of Accountants (International Federation of Accounting, IFAC)

was founded.
1977 – Group of Experts appointed by the Economic and Social Council of the United Nations

issued a report that consists of four sections of the International Standards of Accounting and

Reporting for Transnational Corporations.
1978 – The Commission issued a directive Fourth ropa Society as a first step towards

harmonization of European accounting.
1981 – IASC established a consultative group consisting of non-member organizations to expand

the inputs in the manufacturing of international standard.
1984 – London Stock Exchange said that it hoped that the companies that list their stocks, but not

incorporated in England or Ireland to adjust to international accounting standards.
1987 – The International Organization of the Capital Market Commission (IOSCO) said in its

annual conference to encourage the use of common standards in accounting and auditing

1989 – IASC issued exposure draft 32 of the comparative financial statements. Basic Framework

for the Preparation and Presentation of Financial Statements issued aoleh IASC.
1995 – The Board of IASC and the IOSCO Technical Committee approved a work plan and

successfully issued IAS solution to form a core group of a comprehensive standard. Success in the completion of these standards menmungkinkan IOSCO Technical Committee to recommend endorsement of IAS in the collection of capital across borders and the need for listing of shares across global markets.
1995 – The European Commission adopted an emergency approach to the harmonization of accounting that will allow the use of IAS by companies that do the listing of shares in the international capital markets.
1996 – U.S. Capital Markets Commission (SEC) announced that it “…. support the objectives of the IASC to develop, as quickly as possible, accounting standards that can be used to prepare financial statements that can be used in cross-border securities offerings.
1998 – IOSCO published a report “International Disclosure Standards for Cross-Border Travel and Registration of Foreign Issuer Shares to Prime.”
1999 – The International Forum for Accountancy Development (International Forum on Accountancy Development-IFDA) met for the first time in June.
2000 – IOSCO received, in total, all 40 core standards set by the IASC in response to the wish list of IOSCO in 1993.
2001 – The European Commission proposed a rule that would require all EU companies listed their shares on a regulated market to prepare consolidated accounts according to IAS in 2005 at the latest.
2001 – International Accounting Standards Board (Accounting Standards Board Internastiaonal-IASB) replaced the IASC and take over his responsibilities as of 1 April. IASB standards known as International Financial Reporting Standards (IFRS) including IAS and issued by the IASC.
2002 – The European Parliament approved the European Commission proposal that virtually all EU companies listed their shares must follow IASB standards starting no later than 2005 in the consolidated financial statements. Member states may extend this provision to the financial statements of companies that do not keep records of individual stocks and companies. European Council later adopted a rule that allows this is achieved.
2002 – IASB and the FASB signed the “Norwalk Agreement” which contains the commitment to the convergence of international and U.S. accounting standards.
2003 – Council of Europe approved the Fourth and Seventh EU Directives are amended, to eliminate the inconsistency between the old directive with IFRS.
2003 – IASB issued IFRS 1 and IAS 15 revisions to.
Glance Major International Organizations Regarding Promoting Harmonization of Accounting
Six organizations have become a major player in the determination of the international accounting standards and in promoting international harmonization of accounting:

  1.  International Accounting Standards Board (IASB)
  2. Commission of the European Union (EU)
  3. International Organization of the Capital Market Commission (IOSCO)
  4. International Federation of Accountants (IFAC)
  5. Intergovernmental Working Group of Experts on the United Nations International Standards of Accounting and Reporting (International Standards of Accounting and Reporting – Isar), part of the United Nations Conference in Trade and Development (United Nations Conference on Trade and Development-UNCTAD)
  6. Accounting Standards Working Group in the Organization of Economic Cooperation and Development (OECD Working Group)

International Accounting Standards Board
IASB objectives are:
A. To develop in the public interest, a set of global accounting standards are of high quality, understandable and can be applied which requires high quality information, transparent, and comparable financial statements.
2. To encourage the use and application of these standards are strict.
3. To bring the convergence of national accounting standards and International Accounting Standards and International Financial Reporting toward high quality solutions.
Structure of the IASB’s New
1. Trustee agencies
2. Council of IASB
3. Standards advisory council
4. International financial reporting interpretations committee (IFRIC)
The European Union (Europen Union-EU)
One goal is to achieve the integration of EU financial markets of Europe. For this purpose, the

EC has introduced a directive and take a huge initiative to achieve a single market for:
A. Changes in capital in the EU
2. Create a common legal framework for securities and derivatives markets are integrated
3. Achieve a single set of accounting standards for companies whose shares are listed.
International Organization of the Capital Market Commission (IOSCO)
International Organization of the Capital Market Commission (the International Organization of

Securities Commissions-IOSCO) consists of a number of regulatory bodies of capital markets in


over 100 countries. According to the budget opening IOSCO:
Capital market authorities decided to work together in ensuring better market regulation, both at domestic and international, to maintain a fair marketplace, efficient and healthy:
• Mutual exchange of information based on their experience to encourage the development of the domestic market.
• Uniting efforts to create standards and penhawasan effective international securities transactions.
• Provide assistance together to ensure market integrity through the application of strict standards and effective enforcement against offenses.
IOSCO has worked extensively in international disclosure and accounting standards to facilitate

the ability of firms to raise capital efficiently through the global securities markets. Its main

purpose is to facilitate a process that can be used by publishers world-class shares to raise capital

in the most effective and efficient at all that there is a demand for capital market investors. The Committee is working with the IASB, among others, by providing input to the IASB projects.
IFAC is a world-class organization that has 159 member organizations in 118 countries, representing more than 2.5 million accountants. Founded in 1977, whose mission is to support the development of the accountancy profession with harmonized standards so that accountants can provide consistently high quality services in the public interest.
IFAC Council, which meets every 2.5 years, had a representative from each IFAC member organizations. The Assembly has a council, composed of individuals who come from 18 countries, elected for 2.5 years. This council, which meets two times each year, setting policy and overseeing IFAC operations. Daily administration conducted by the IFAC Secretariat, located in New York, which has a staff of accounting professionals from around the world.
Isar was formed in 1982 and is the only inter-governmental working group to discuss accounting and auditing at the corporate level. Particular mandate is to encourage the harmonization of national accounting standards for companies. Isar realize this mandate through discussion and adoption of best practices, including those recommended by the IASB. Isar is an early supporter of the environment reporting and a number of recent initiatives focused on corporate governance and accounting for small and medium sized companies.
OECD is an international organization advanced industrial countries-oriented market economy. With a membership consisting of the advanced industrial countries is greater, the OECD is often a formidable opponent against the other bodies (such as the UN or the International Confederation of Free Trade Union) which has a tendency to perform acts contrary to the interests of its members.


Sumber :

Choi, Frederick D.S and Gary K. Meek. 2010. International Accounting. Buku 2. Salemba Empat. Jakarta.




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