Explain the importance of consistency between firms in various Essay

Explain the importance of consistency between firms in various countries in keeping standard accounting practices. Where possible give examples to illustrate your answer - Essay Example Most importantly, it can be affirmed that the significance of consistency between firms in varied nations in the context of keeping standard accounting practices lay in raising transparency of financial reporting procedure (Securities and Exchange Commission, 2008). With this concern, the prime intent of this essay intends to analyze and discuss the importance of consistency between firms in terms of standard accounting process relating to cross-border transactions. Moreover, appropriate examples will also be provided while elaborating the above stated aspect. Standard accounting practices are regarded as structured accounting processes that aid in measuring the financial position and status of an entity. The prime objective of preparing financial statements for any business organization is to make economic decisions more accurately. Based on the viewpoints of Holloway (2011), standard accounting practices assist business entities in keeping proper record of their respective assets, liabilities, income as well as expenses along with equity and cash flow among others (Holloway, 2011). According to the report published by Governance across Borders (2013), it can be ascertained that fair presentation is highly essential for ensuring rising transparency by keeping and following varied standard accounting practices. At the same time, it can be affirmed that faithful representation of transactions can also ensure greater consistency between firms in case of cross border business operations (Governance across Borders, 2013). According to the viewpoints of Ramanna & Sletten (2009), varied standard accounting practices such as IFRSs assist global nations as well as organizations to maintain fairness in the accounting transactions. At the same time, these practices ensure keeping consistency between firms by representing realistic figures of assets, liabilities, income and expenses of a firm during the conduct of business