Inadequate international standards of financial accounting and reporting

Comparability of financial reports is important to all users - shareholders, lenders, creditors, employees, governments and the general public. Users also need financial reports to be reliable - which means that, as well as being comparable, financial reports must be based on relevant, balanced accounting standards. Governments need corporation reports which are comparable in order to be able to monitor volatile short-term movements of capital, to protect consumer interests, to regulate monopolistic practices, and to prevent artificial transfer pricing and tax evasion. Absence of standardized accounting may be used by corporations to avoid complete disclosure of information which would reveal the negative social impact of some policies. Progress in this area is particularly essential for a wide range of policies and programmes concerning multinational enterprises, as well as for general development. The lack of international standards for the accounts of governments impedes the evaluation task of international funding agencies of applications for developmental grants, aid and loans.