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THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.73, # 1, 2016, pp. 38-44

professionals.
Second stage: From the middle of the XX century until the end of XX century,
international system of accounting begins to take shape. During this period appear
first international accounting standards, and the process of harmonization of
accounting systems across countries begins. Two international bodies – IASC and
IFA are formed, and their activity is gradually recognized and supported by major
international institutions.
Third stage: From the end of XXs century, until present day, the efforts to
harmonize accounting systems evolved into a broader concept of «international
convergence». International accounting standards are official accepted in many
countries and a larger portion of global economy moves toward using IFRS.
International system of accounting moves toward becoming a global system of
accounting.
The purpose of accounting is to communicate an organization‘s financial
position to company managers, investors, banks, and the government. Accounting
provides a system of rules and principles that prescribe the format and content of
financial statements. Through this consistent reporting, a company‘s managers and
investors can assess the financial health of the firm.
Historically, countries have followed different accounting standards. If
different accounting standards are used, however, it‘s difficult for investors or
lenders to compare two companies or determine their financial condition. US firms
and any listed on a US stock exchange must prepare financial statements in
accordance with the US Financial Accounting Standards Board (FASB) standards,
which are known as generally accepted accounting principles (GAAP). Firms based
in the European Union (EU) follow standards adopted by the International
Accounting Standards Board (IASB) known as international financial reporting
standards (IFRS). Over one hundred nations have adopted or permit companies to
use IFRS to report their financial results. The United States is moving toward
adopting IFRS but hasn‘t committed to a time frame. The FASB and IASB are
working on harmonizing the two accounting standards.
The scientific novelty of the research. Summarizing information presented
above, we note that today IFRS is either permitted or required for either full or
partial use by publically traded companies in 128 countries in the world and by
unlisted companies in 106 countries. Such widespread use of IFRS demonstrated
global acceptance of international system of accounting.
The three main advantages of a single set of international accounting standards
are (1) an increased comparability between firms, which reduces investor risk and
facilitates cross-border financing and investment; (2) a reduction in the cost of

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