Harmonization in accounting standards did not occur until the 1990s. An international accounting board proposed new ways to do business. Harmonization was meant to improve the business practices of each country. Different accounting standards may be used by different countries. To ensure that businesses can continue to operate, it is essential that all accounting guidelines are followed. The United Nations, International Accounting Standards Committee (EC) and EC are three of the most important international organizations. These groups came together to reach an agreement on one accounting standard to apply to both American and international organisations, click site.

This idea could be used to overcome some language barriers that exist between countries. The largest international organization, the EC, has adopted the idea for harmonization of reporting accounts. There wasn’t consensus among these international organizations about how to harmonize reporting accounts. K. Van Hulie is an author who stated that there isn’t a general consensus about what should harmonise: annual accounts and consolidated accounts, all other accounts, all account types, all accounts of listed entities as well accounts belonging to large corporations. (Hulie 390). Because of the differences in how organizations operate, it’s easy for everyone to understand why there wasn’t an agreement. It is possible for countries to refuse financial information to cause problems. It is crucial that international accounting bodies reach an agreement. Harmonization will have a significant effect on the accounting industry around the globe.

Harmonization would allow countries sharing comparable financial information. International business could be simplified because each country would use similar accounting practices. This idea is beneficial because it may reduce the number of disputes about financial information. This would happen because everyone would have the same procedures, and all would know what they can do. The size of each business is a concern as they are not all the same. Harmonization may not work if certain businesses are larger than other.

Aziz Jaafar stated, “Firm size was an important determinant.” Evidence supports the claim of larger firms making more voluntary disclosures (Jaafar159). It is more common to expose larger firms to the public than smaller companies. This is a major reason why voluntary disclosures are encouraged. Not only are the businesses’ sizes important, but so too is the country. Different countries can produce different financial data due to differences in their sizes. It is possible for this to be a reason why different accounting procedures are not used. Not only is there the country’s size, but also the number of businesses in that country. Financial information can differ greatly between countries, but some countries may not want to have the same information. Although the idea of harmonization is admirable, it was eventually abandoned. This new idea is known as convergence accounting.