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(1) The article on global accounting convergence by Hail, Leuz, and Wysocki (Part 1) examines several factors to consider regarding the potential adoption of IFRS by the United States. Overall, based on the article, do you think the adoption of IFRS by the United States is a net gain for the US marketplace? Give three reasons to support your position (be specific). Please include specifically what groups will be affected and why IFRS would be better or worse than US GAAP. 1 2 I believe that adopting the IFRS would be a net gain for the United States. Many countries have already moved to adopt these standards. As of 2011, over 120 countries were using IFRS as their main accounting standard system. IFRS has the potential to facilitate cross-border comparability, increase reporting transparency, decrease information costs, reduce information asymmetry and thereby increase the liquidity, competition and efficiency of markets (Choi & Meek, 2005). * By adopting the IFRS, the country's businesses would be presenting financial statements on the same foundation that foreign companies would. This would make comparison between global competition much easier. It would also make it easier on the companies based out of the U.S. that do business globally, because now they would only have to present their financial statements based on one set of standards, rather than multiple sets. Currently, the U.S. operates off of GAAP, so those businesses with subsidiaries overseas have to report in GAAP and IFRS (or another reporting standard). By globally converging, there would be no extra work to report in different codes and it would be easier for investors, management, etc. to compare their statements globally. Companies would be saving money on preparation. Preparers are not doing twice the workload. And users are able to use one standard to decipher financial

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