Question
Although a number of countries have adopted International Financial Reporting Standards (IFRS), the United States has not yet decided to adopt IFRS into the financial reporting practices. Hail et al. (2010a, 2010b) argue that the adoption of IFRS is unlikely to improve reporting quality, increases transaction costs and potentially enhances comparability for US firms.
Required:
(a) Critically evaluate the above statement.
(b) What are the potential reasons for not adopting IFRS in the US?
(c) Do you think that the US will adopt IFRS in the near future?
Note 1: Word limit for Question 1 is 1,500.
Note 2: Professional marks will be awarded for format, clarity and expression.
Note 3: The presentation of Question 1 should include Introduction, Discussion, Conclusion and List of references.