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.
A third problem affects importers, exporters and transnationals: foreign currency translation accounting. The rules are burdensome, and transnationals keep separate books in local currencies in addition to those in the home country money values. Again, special accountants are needed to deal with foreign currency exchange and translation accounting requirements.
Finally, there has been the recent arrival of theories of inflation, or replacement cost accounting. Government tax specialists are pitted against private sector accounting firms; and accounting firm partners, economists, and corporate secretaries and treasurers debate among themselves the standards, or supposed correct methods of recording the apparent increase in value of assets as inflation proceeds. Different governments have different approaches but the net result has been still another set of books to be kept by companies, revealing assets and making other changes according to the prevailing standard. Governments' standards have been revised several times in the past few years, as have the standards recommended by the accounting profession: the resulting confusion, debate, and cost of maintaining the new accounts and new 'books', have been very high.