Question

Why must public companies comply with IFRS?provide three points.

Answer 1

IFRS is an acronym for International Financial Reporting Standards. It is a relatively new international accounting standard that outlines how some transactions and events should be reported on financial statements.It is not based on immutable rules rather it is based on  principles.This is a stark contrast to Generally Accepted Accounting Principles(GAAP).

• IFRS reduces the cost of investments and provides high quality information to stakeholders. This enables investors to have an accurate view of the company they are investing in.
• Multinationals can benefit immensely from IFRS by using the standard across the countries they are operating in.
• IFRS increases transparency by enabling companies to be compared with their peers in other countries. This enables investors to make informed decisions. It also enables companies to raise capital.