Companies should comply with International Financial Reporting Standards (IFRS) for several reasons:
Global Standards: IFRS provides a globally accepted set of accounting standards that are followed in many countries around the world. By complying with IFRS, companies can ensure that their financial statements are comparable across different countries and regions.
Improved Transparency: IFRS promotes transparency and consistency in financial reporting. It provides clear guidelines for accounting for complex transactions and ensures that all relevant financial information is disclosed.
Attracting Investors: Companies that comply with IFRS are seen as more attractive to investors, particularly international investors, because they provide greater transparency and comparability of financial statements. This can help companies raise capital and expand their business.
Regulatory Compliance: Many countries have adopted IFRS as their national accounting standards, and in some cases, compliance with IFRS is mandatory for companies that operate in those countries. Non-compliance can result in legal and financial penalties.
Overall, complying with IFRS can help companies operate more efficiently and effectively, and can enhance their reputation with investors and other stakeholders.