Five years ago ICC issued a policy statement on “Improving the Quality of Financial Information”. That statement noted that there is a substantial gap between the quality of financial information available in many countries and the reasonable expectations of the users of this information. It also identified the closing of that gap as a major priority issue for all actors in the international financial marketplace – buyers, sellers, investors, lenders, borrowers, regulators, finance ministries and central banks. And it called for:
“… the changes necessary at national and international level so that all general-purpose financial information may be prepared according to a single worldwide framework using common measurement criteria and requiring fair and comprehensive disclosure. The framework must provide users with a transparent representation of the underlying economics of transactions and must be applied rigorously and consistently.”
The potential benefits of a worldwide framework for financial reporting are significant:
- Greater comparability and comprehension of financial information for investors, especially those engaging in cross-border transactions,
- Increased availability of capital and lower costs,
- More efficient allocation of resources, and
- Higher economic growth.