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1A. Benefits that SEC believes will result from global accounting standardization through convergence:

The SEC encourages the convergence of IFRS and GAAP because it believes that doing so will benefit U.S investors. The incorporation of IFRS in GAAP will protect the investors, maintain the fair representation of financial statements and increase comparability and material information for investors to make better decisions. The primary benefit will be the reduction in discrepancies in financial statements among different countries around the world. “SEC, with convergence, wants to reduce regulatory impediments to cross-border capital transactions that result from disparate national accounting standards.” [3]

As noted on pages 5 and 8, paragraph 2 and 3 respectively, some additional benefits are:
● “Greater comparability for investors across firms and industries on a global basis;
● Reduced listing costs for companies with multiple listings;
● Increased competition among exchanges;
● Better global resource allocation and capital formation;
● Lowered cost of capital
● A higher global economic growth rate
● Improved financial statement comparability among companies worldwide;
● Streamlined accounting processes for multinational companies; and
● Easier access to foreign capital and improved liquidity, leading to a reduced cost of capital” [5,8] 1B. Areas of concern within the SEC’s work plan before execution of the use of IFRS by us issuers:

“A Work Plan was made to identify the areas of concerns within the roadmap of the proposed convergence of IFRS and GAAP, which included:

1.Sufficient development and application of IFRS for the U.S. domestic reporting system;
2. The independence of standard setting for the benefit of investors;
3. Investor understanding and education regarding IFRS;
4. Examination of the U.S. regulatory environment

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