There has been rapid uptake and adoption of international financial reporting standards (IFRS) by numerous nations across the globe over the recent years. The standardization reflects the growing interconnectedness amongst different countries as well as the emergence of new forms of international governance. The basic foundation of these global financial standardization criteria is the International Accounting Standards Board (IASB) that was founded with an aim of imposing the adoption and promotion of a single economic set of global standards that can be used by different nations around the world. Australia is amongst the numerous world countries that settled in the adoption and promotion of the IFRS (Toselli & Poli, 2007). Australia adopted the IFRS to replace its domestic accounting standards and to seek global solutions regarding accounting operations. Consequently, changes were made in the way its local companies carried out their share-based payments, handling of intangible assets, and the use of financial instruments amongst other financial aspects. The stipulated drivers that encouraged the country to adopt the IFRS included the desire to improve its general comparability of financial statements, to offer cost of capital savings for its companies, and to consequently ease the way Australian companies operated on international platforms. Nevertheless, various pros and cons are associated with the adoption of the IFRS in Australia (Antill & Lee, 2008).

PROS OF THE ADOPTION OF IFRS IN AUSTRALIA
The adoption of the IFRS in Australia led to the improvement of the quality of the Australian financial statements and efficiency in the capital market. IFRS has facilitated the comparability of financial statements amongst different financial investors in the country. Besides, it improved the cross-border listing, reduced the cost of capital, and improved access to foreign capital in Australia. Increased financial comparability enhances the general flow of financial investments. On the other hand, reduction of capital costs results in the removal of premiums and the general risks that are associated with the challenge of not understanding financial statements accordingly. IFRS was also beneficial to the Australian stock exchange. In fact, the standardization of financial reporting attracted the attention of many foreign and overseas companies that typically increased exchange revenue in the country. Besides, there was a noted improvement in the country’s foreign capital access (Chand & Patel, 2011)

IFRS led to the simplification of Accounting for Multinationals in Australia. The adoption of IFRS resulted in the subsequent harmonization of the domestic accounting standards in the country to facilitate the appropriated transitions in the country. There was a simplification of and easier preparation of comparable internal reports for subsidiary management operations. Also, there an easier and more straight-forward way of consolidating the financial statements of the country’s multinational organizations. Appraisals of international business takeovers and combinations consequently became simpler through the adoption of the IFRS. Nevertheless, simplification of accounting for multinationals in Australia led to efficiency in the capital markets of the country (Zingel, 2006). In fact, Australian companies benefited as subsidiaries of companies of foreign origins like the United States that had mightier market capabilities than the domestic firms. Many world countries with dominant economies resented the idea of adopting the IFRS that facilitated the transferability of their respective company staffs. Company workers who were natives of overseas companies brought technical expertise and essential financial competence that promoted the growth and development of Australian companies (Elliott & Elliott, 2008)

There was the development of international accounting firms in Australia because of the IFRS adoption. There was a respective transfer of the accounting staffs with exceptional IFRS expertise to serve in the firms. Thankfully, the accountants had the capabilities of working under all financial and accounting circumstances that provided a sense of direction to the local Australian accountants who were struggling with the standardization transition. Besides, the fact that Australia is considered as amongst the first world countries that adopted the IFRS has made their local accountants to be accredited internationally on the new standardization grounds. The adoption of standardized accounting system in Australia also improved financial auditing. Consequently, it is easier to carry out verification because uniformity in global accounting standards accelerates the accommodation of audits and typical removal of local differences in the expertise regarding the local accounting standards (Epstein & Jermakowicz, 2007)

There was a massive growth in the international comparability in Australia that enhanced efficient allocation of scarce resources in the country. Consequently, the development of IFRS made it easier for different world countries to set and typically commit to a single set of accounting standards that appropriated the achievement of global accounting comparability. Thankfully, it could have been harder for foreign investors to understand the existing differences in the Australia’s accounting framework. In fact, initiatives were set to help support the country to accommodate efficiently and adopt the new accounting standards. Imagine how inefficient it could have been for over 100 international countries to operate with independent accounting standards. The Australian government has grown to be the general beneficiary of the adoption of the IFRS. The government of Australia adopted and incorporated the IFRS in all its economic setups and operations. Since Australia was amongst the first countries to adopt the IFRS, global regulators were deported sent to assist in its setting and consequently address its complexities (Eun & Resnick , 2012)

Not so many countries were adopted the IFRS at the time when Australia accepted the transition. Hence, as other countries are struggling to accept and initiate the system in their different economic setup, Australia is working on improving and perfecting the standards. Besides, Australia benefited with the supplement of international accounting regulatory bodies that assisted in the adoption of the new standards without much difficulties. Furthermore, the country also gained from the cost sharing measures that were directed to countries that adopted the standards during its early stages. Nevertheless, the adoption of IFRS has not only assisted Australia in boosting its national fame and pioneer activities in the global accounting standardization, but it has also improved its economic capabilities. Foreign investors and companies find it convenient to operate and transact under a standardized accounting grounds that is fair to every productive player (Hennrichs, 2009)

The adoption of the IFRS in Australia changed the countries financial and accounting procedures for the better. Some Australian accounting standards were replaced by new and more acceptable international norms that facilitated economic and accounting transaction on a global platform. The country advised its company managers and other heads of financial and accounting institutions on the underlying need of adopting globally acceptable accounting standards. Despite the associated complexities, the shareholders managed to appreciate the significant effect of adopting the IFRS thus accelerating the adoption of the rules in the country (Weygandt, Kimmel & Kieso, 2010). Also, the concerned audit committees also settled and decided to assist in accelerating the adoption of the standards in Australia. Far from that, the adoption of the IFRS in Australia improved the living standards of the Australian citizens. The emergence of new and foreign companies was accompanied by job opportunities for the native Australian people. Besides, the adoption of the new accounting and reporting standards facilitated the growth of the general Australian economy to global capacity because the adoption of the IFRS provides standard economic grounds for all nations around the world. Shareholders of both domestic and foreign companies in Australia accepted and supported the new transition for the better good of the country (Gregoriou & Gaber, 2006)

Australia managed to restore confidence in corporate reporting as well as the creation of a free flow of market that attracted different global nations. Besides, the country now boasts with more transparent and efficient reporting harmonization. Various economic entities in Australia are now able to make unreserved statements from which their financial statements are prepared. Consequently, the adoption of the IFRS in Australia has offered a better environment for the different financial entities in the country to compete and operate on international grounds. In retrospect to that, investors are now able to conduct a cross-border comparison of accounts. As a result, Australian companies have an advantage of reduced cost of capital that has typically assisted them to raise their capital. Also, Australia has successfully adopted the international quality of accounting and reporting standards that can attract investors from other world countries. In fact, countries are now accelerating their efforts towards the adoption of the rules in their native countries because they view it as a success in Australia. New Australian companies are now being developed and integrated into the new global accounting standard that was embraced as the basis of reporting in the country (Hinz, 2007)

CONS OF THE ADOPTION OF IFRS IN AUSTRALIA
Meeting and adopting the IFRS was costly. Numerous changes had to be initiated to facilitate the efficient adoption of the system in Australia. In fact, even the world nations that boasts with superior commercial operations like the United States of America did not adopt the IFRS fully in the first place unlike Australia due to fear of failure. Besides, the country had to rely on competent foreign accounting regulators in assist in interpreting the new global standards. Many accounting and reporting issues had to be tested in during the adoption of the IFRS in Australia that were costly in the end (Kirk, 2009)

Company heads and directors had to make timely accounting and reporting responses from the new accounting directives that had been developed in the country. Furthermore, they were expected to operate and deliver under pressure to accept and comply with the newly adopted reporting laws. Apart from meeting the strict accounting standards, company heads had to be more authoritative in their positions as a mechanism of meeting the required standards. Companies also had to develop ways that could facilitate a smooth adoption of the rapid changes that was being experienced in the country (IFRS: An overview, 2008)

It was difficult for the domestic companies in Australia to comply and integrate with reporting and financial regulators from other countries. In fact, some companies like banks had to delay the transition and continued to operate with the original Australian accounting standards. The delay was because various requirements and measures had to be satisfied as per the IFRS. Also, companies had to seek frequent consultations with foreign firms and accountants who were experienced in the IFRS. Despite the fact that the transition did not have a notable impact on the primary flow of capital in the domestic companies, integrating with other reporting regulators generated inefficiency in the original operational activities in the companies (Mirza, Holt & Orrell , 2006)

The adoption of the IFRS led to continued auditor dependence amongst the domestic firms in the country. It was passed that small Australian companies that were adopting the IFRS had to depend on approved and competent reporting regulators in for auditing purposes. The dependence auditor rules have made the small companies access full freedom in their financial and accounting activities. Nevertheless, the companies are required to interpret the IFRS requirements broadly. Much small company and financial institutions’ directors have been typically found to express their concerns about the IFRS auditing rules and its adverse effects in their growth and development (Mirza, Holt & Orrell , 2008)

Market participants in Australia have to adopt new mechanisms of adapting with the presented arising challenges that develops from the adoption of the IFRS in the country (Zingel, 2006). Many concerns and issues have been noted in Australia because each company and economic entity in the country should meet the IFRS. Consequently, the affected financial players have to develop unnecessary flexibilities to adapt with the new reporting laws in the country. As a result, the country finds it difficult to predict the apparent pattern in its economic setups because of varied and diverse flexibility results (Special issue, 2005)

Australia had to embrace the changes in the treatment of redeemable shares in the country. The domestic companies in Australia found it difficult to ascertain the comparatives for the redeemable share allocations of their respective companies. For that reason, the reported number of shares and profits of the companies were typically incomparable resulting in frustrations. Additionally, company owners with more than one companies found it difficult to embrace and adopt the IFRS especially the ones who did not have proper financial training. Thus, they were forced to lease or sell some of their companies for the purpose of meeting the expected global standards. Lease accounting was difficult to interpret according to the new accounting rules and regulations. A subsequent decrease in their profit allocations was registered in the process. Besides, company directors and other heads of financial institutions had to employ company accountants who had experience and training about the IFRS. Hence, they had to settle with the unexpected costs that reduced the outcome of their enterprises (Parry & Perkins, 2005)

The adoption of the IFRS made it difficult for the country to ascertain the best taxation platform for that was acceptable by everybody. The country took some time to adjust to the new criterion of intangible asset taxation that caused unnecessary frictions in the national income of the country. Australia had to subject all its accountants to the new reporting and accounting regulations in the country. In other cases, some controllers were forced to bolster their accounting knowledge to incorporate the new standards and requirements. Contrary to that, there was a massive growth in job insecurities in the sector of accounting in Australia. Most of the accountants in the country were trained from their native accounting grounds. Hence, they were not competent enough to handle the new requirements and transitions that were being experienced in the field of accounting. Domestic companies had to settle for the employment of accountants from other countries who had competence in the IFRS (Reeve, Warren & Duchac, 2012)

Australian economy was slowed down by the countries decision of adopting the IFRS. The IFRS had strict rules and regulations that required time to incorporate fully and adopt. Changes were made in all economic entities of the country thus slowing down the already developed financial acceleration and growth that the country was experiencing originally. Moreover, the IFRS had new accounting requirements that were difficult to interpret. In fact, there have been numerous attacks on the Australian government’s questioning its decision of deciding to adopt the IFRS in the country. The IFRS is associated with various complexities that are difficult to address. Besides, the world has become more complicated now since the IFRS was adopted. There have been ideological divisions and resentments about the actual implications and impacts of the IFRS in the world economy (Collings, 2012)

Despite the fact that numerous complexities that are associated with the adoption of the IFRS in Australia, the effort should not be thrown away. The adoption of the IFRS has created a better world comparability platform and efficiency in the capital market that was never experienced in the country before. Directives should be developed to address the complexities of the standards and help spearhead it to further levels. A massive improvement in the general world economy will be recorded if the IFRS is successfully implemented in all the countries across the world (Siegel & Shim, 2006)

References
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