The new world order cometh...

In case you thought globalization and the new world order were on the wane, you may wish to take note of this proposed change in Accounting standards. If you want a sure fire way to know how global integration is going, check out how we count the money... Generally, this is probably a good idea, as it will allow more comprability across nations.

The adoption of international accounting standards by the United States would move the world toward one set of standards, which should make it easier for investors to compare companies operating in differing regions, and make it easier for firms to raise capital in whatever market seems most attractive.

My primary concern, as mentioned in the article, is that the International Standards place a premium on Auditor independence and judgment.

In a world with more professional judgment, the auditors would be expected to tell companies that a given accounting treatment violates a standard because it produces a misleading result. Whether they would be willing to do that, and whether all would be equally willing, could become an issue.

This is not necessarily a bad thing, but when the American accounting industry lays claim to a number of scandals invovling auditors covering or tacitly allowing shady corporate activity, you may end up with unintended consequences...