International Financial Statement Analysis

FOREWORD

Investors now routinely scour the globe looking for diversification and investment opportunities. At the same time they seek new and profitable opportunities, the economies in which they invest directly benefit from greater access to capital for development and growth, and from a lower and more competitive cost of capital. Because of the benefits to cross-border investors and economies alike, the increasing globalisation of securities markets and capital is likely to be a defining hallmark of the twenty-first century.

Although globalisation has been gradually increasing for many years, the final building blocks—the infrastructure necessary to ensure both free and unfettered movements of capital across borders and the investor protections required to support the flows—are just now being put in place. They include cross-border stock exchanges, financial institutions with global reach that can facilitate the efficient movement of capital from investors to companies, and the gradual development of cooperative arrangements among global regulators essential for the monitoring, oversight, and enforcement of consistent regulations and standards for investment.

However, among the most critical and urgent of these changes is the development of a common financial reporting standard, really a common language applicable and understandable across the globe, and the importance of a single, high-quality standard cannot be overstated. The effective functioning of capital markets and the ...