A financial reporting system
supported by strong governance, high quality standards and a sound regulatory
framework is the key to economic development. Indeed, high quality standards of
financial reporting, auditing and ethics form the foundations of the trust that
investors place on financial information and therefore play an integral role in
contributing to a country’s economic growth and financial stability. As the
forces of globalisation prompt more and more countries to open their doors to
foreign investment and as businesses expand across borders, both the public and
private sectors are increasingly recognising the benefits of having a commonly
understood financial reporting framework, supported by strong globally accepted
standards. The benefits of a global financial reporting framework are numerous
and include:
- Greater comparability of financial information for investors;
- Greater willingness on the part of investors to invest across borders;
- Lower cost of capital;
- More efficient allocation of resources; and
- Higher economic growth.