Role and meaning of international financial accounting standards in harmonization of accounting unification systems.

Sailauova Meruert Bakitzhanovna

Students of Kyzylorda State University

of the name Korkyt Ata

Scientific leader: Baimakhanova Aktolkyn

Abilasanovna

Department of “Account and audit” teacher

Master the profession of Economics

International Financial Accounting Standards started being developed in compliance by requirements of multinational corporations. Standards were applied at the enterprises and in financial institutions of the different countries having unequal level of economic development and the national, often century traditions. Having subsidiaries, branches and representations on territories of several states, such corporations faced essential distinctions as conducting accounting, the tax legislation, an assessment of means in balance, etc. All this complicated definition of financial results of activity and drawing up summary annual accounts on corporation as a whole. Incomparability of accounting given and insufficient transparency of account didn't give the chance to reveal an original financial position of partners in business in the different countries that led to severe losses and even crash of the enterprises “daughters” when the “parent” company trusted false data of "daughters" or the contractors.

Thus, IFRS represent system of standards of the calculation and the accounting which provides with reliable information not only the external user – the investor, but also governing bodies of the enterprise.

Financial reports – the important instrument of informing and the control, intended for the solution of problems of the big companies generated by division of property and management. In other words, the account is a part of a control system of the corporation, which purpose – to induce managers to work in interests of the owner of firm.

The last decades and the beginning of the XXI century are celebrated XX century by special attention to a problem of the international unification of accounting. The business development, being accompanied increase of a role of the international integration in the economy sphere, makes certain demands to uniformity and transparency of the principles of formation applied in the different countries and algorithms of calculation of profit, taxable base, conditions of investment and capitalization of the earned means, etc. Our experts faced this problem in the field of accounting upon country transition to market economy and establishment of business contacts with foreign investors at the level of the organizations (enterprises), joint-stock companies, etc.

The problem of discrepancy of models of accounting isn't unique, inherent only to Kazakhstan. It has global character. In the course of work of originators and users of financial reports around the world there is a problem of unification of accounting.

Now the greatest popularity was received by two approaches to its decision: harmonization and standardization. They at first differed both on the ideology put in them, and by the principles of realization. However in recent years both terms are often used as synonyms or as complementary concepts.

The idea of harmonization of various systems of accounting is realized within the European Community (EC). Its essence is that in each country there can be the model of the organization of the account and system of standards, it regulating. The main thing that these standards didn't contradict similar standards in community member countries, i.e. were in relative "harmony" with each other. Work in this direction is conducted since 1961. For formation of the concept of development of the account in EU countries the research group on accounting problems was created. Its activity was considered as a component of the program of harmonization of national versions of the law on the companies. Results of this work are published in the form of normative documents which were included by each member of EU in the national legislation regarding accounting.

The idea of standardization of registration procedures is realized within standardization of the account which carries out Committee on International Financial Reporting Standards, – IASC (International Accounting Standards Committee), developing and publishing International Financial Reporting Standards – IAS (International Accounting Standards – IAS). The essence of this approach consists in development of the unified set of the standards applied to any situation in any country owing to what need of creation of national standards disappears. As for introduction of uniform standards, it should achieve not a legislative way, and by the voluntary agreement of the professional organizations of the countries. [5, page 407]

Now some systems of accounting, in particular, Anglo-American, European and some other are known. However, according to experts, the standards developed by IFRS, will be used by the majority of the countries of the world in the near future. Growth of popularity of the international standards was caused by two events. Agreement signing between IASC and the International organization of the commissions on securities – IOSCO (International Organization of Securities Commissions) in which found reflection aspiration of financial circles and the congress of the USA to attract more foreign companies to the quotation of the actions at the American exchanges was the first event.

The second event which has accelerated transition to IASC, occurred at association of Germany. This fact in many respects predetermined growth of requirement of attraction of the capital to the country. In this regard the financial statements of the companies had to be guided more by the external user, for example by stock exchanges or the international investors. For this reason the companies entering into listing of stock exchanges and making consolidated financial reports, were compelled to accept IFRS.

Now there are some forms of use by the countries of International Financial Reporting Standards:

- application of IFRS as national standards. Number of such countries treat: Cyprus, Kuwait, Latvia, Malta, Pakistan, Trinidad and Tobago, Croatia;

- use of IFRS as national standards but on condition that for the questions which haven't been mentioned in the international standards, the national are developed. Such countries are Malaysia and Papua New Guinea;

- use of IFRS as national standards, however their modification according to national features is in certain cases possible. It is Albania, Bangladesh, Barbados, Zambia, Zimbabwe, Kenya, Colombia, Poland, Sudan, Thailand, Uruguay, Jamaica;

- national standards are based on IASC and provide their additional explanations. Among such countries it is possible to call China, Iran, Slovenia, Tunisia, Philippines;

- national standards are based on IASC except that each national standard includes the situation comparing the national standard to IASC (Australia, Denmark, Italy, New Zealand, Sweden). [4, page 55]

Let's consider positive and negative lines of IASC.

Their objective advantages before national standards in the certain countries are:

- accurate economic logic;

- generalization of the best modern world practice in the field of the account;

- simplicity of perception for users of financial information around the world.

Thus the international standards allow not only to cut down expenses of the companies on preparation of the reporting, especially in the conditions of consolidation of financial statements of the enterprises working in the different countries, but also to lower expenses on attraction of the capital. It is known that market price of the capital is defined by two major factors: perspective return and risks. Some of risks are really characteristic for activity of the companies, however is also such which are caused by a lack of information, absence of exact data on return of capital investments. One of the reasons of information insufficiency is absence of the standardized financial statements which, keeping the capital, actually increases it. Therefore investors agree to gain lower income, knowing that big openness of information reduces their risks.

The data set of advantages in many respects provides aspiration of the various countries to use of IASC in national practice of the account.

However it should be noted and shortcomings of IASC. In particular, it is possible to carry to them:

- the generalized character of standards providing rather big variety of methods of the account;

- lack of detailed interpretations and examples of the appendix of standards to concrete situations.

Besides introduction of standards is interfered around the world by such factors, as national distinctions in a level of development and traditions, and also unwillingness of national institutes to renounce the priority in the field of regulation and account methodology.

The committee on the international standards of accounting takes into account these negative factors and conducts active work on their elimination. So, on January 1, 1989. The committee published the document E32 "Comparability of financial statements" in which 29 offers on restriction of opportunities of a choice of methods of the account resolved by operating IAS are provided. This document is considered by many experts as one of the IASC best projects. He allows to eliminate to a certain extent a number of distinctions in contents of the reporting and to simplify procedures of its transformation when carrying out the comparative analysis in the international context.

As for development of interpretations, the solution of this problem was recognized as one of priority activities of IASC for the next years. Moreover, in 1996 the decision on creation within IASC of standing committee on interpretation of standards (Standing Interpretations Committee, SIC) was made.

Apparently, in 1999-2002 of the company and the exchange of the majority of the countries will make financial reports, using IAS. But it at all doesn't mean that in all cases transition to the international standards is only the correct decision. The active position of the country defending the views, can change the point of view of IASC as Committee seeks to receive and generalize experience of the various countries in the organization of registration systems. It is quite possible that within the next years the constitution of Committee will undergo some changes in the direction of getting stronger interaction between IASC and the national organizations establishing standards in the states.

The used materials

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2. Қаржылық есеп. Оқулық / С.Б. Баймұханова Алматы, Экономика 2007 жыл

3. Анализ бухгалтерской (финансовой) отчетности: учебное пособие для студентов вуза.

4. Жарылгасова Б.Т., Суглабов А.Е. Москва, Экономист, 2004

Бухгалтерский учет в соответствии с международными стандартами финансовой отчетности: Учеб. пособие. / Садиева А.С., Жуматов М.К., Акимова Б.Ж., Тлеуова Э.М.- Астана, 2010.- 423 с.