What is the need of convergence of Accounting Standard with IFRS in India?

The need for convergence of Indian Accounting Standards with Global Standards (IFRS) cannot be undermined in the light of the importance of IFRS. The following points highlight the importance and need for IFRS convergence in India: 1. International Standardization and Quality: A single set of accounting standards would enable international standardization and assure better quality at a global level. 2. Free Flow of Capital: It would permit international capital to flow more freely, thereby enabling companies to develop consistent global practices on accounting. 3. Benefits for Regulators: It would be beneficial to regulators as the complexity associated with the need to understand various reporting regimes would be reduced. 4. Enhanced Investor Understanding: For investors, it gives a better understanding of financial statements and helps in assessing investment opportunities in other countries, apart from their home country. 5. Global Reach for Professionals: It will be beneficial for accounting professionals as the convergence of Accounting Standards with IFRS will enhance their global reach. The above factors highlight the need for convergence. Each country has its own set of rules and regulations for accounting and financial reporting. Translation and re-instatement are of utmost importance in a rapidly globalizing world. International analysts and investors would like to compare financial statements based on similar accounting standards. This has led to growing support for internationally accepted sets of accounting standards for cross-border filings. Harmonizing financial reporting around the world would also help raise the confidence of investors in the information they use to make decisions and assess risks. A strong need has been felt by legislation to bring about uniformity, rationalization, comparability, transparency, and adaptability in financial statements across the globe. A multiplicity of accounting standards is against the public interest. If accounting for the same events produces different reported numbers depending on the system of standards used, it discredits accounting in the eyes of users. It creates confusion, encourages error, and facilitates fraud. The cure for these issues is a single set of global standards of the highest quality in the public interest.