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Various attempts have been made to reduce the accounting diversity that exists internationally. This process is known as convergence and is discussed in more detail in Chapter 3. The ultimate form of convergence would be a world in which all countries followed a similar set of financial reporting rules and practices.
Required:
Consider each of the following factors that contribute to existing accounting diversity as described in this chapter:
• Legal system
• Taxation
• Providers of financing
• Inflation
• Political and economic ties
• Culture
Which factor do you believe represents the greatest impediment to the international convergence of accounting? Which factor do you believe creates the smallest impediment to convergence? Explain your reasoning.
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