Investors would have better understanding of financial statements prepared by companies in Malaysia and in making comparisons between companies worldwide as investors are increasingly making decisions in a global context. Therefore it is important the Malaysian capital market uses internationally recognised standards for financial reporting purposes.
Convergence will enhance national reputation of Malaysia as being in compliance with international accounting standards. The need to establish this profile is imperative to ensure Malaysia is not left out from the globalisation wave, especially since more than 100 countries are converging or have converged with IFRS, including Australia, Brazil, Canada, Korea, South Africa, the United Kingdom and other European countries. China, India, Japan, Singapore and Indonesia are also in the process of converging with or adopting IFRS whilst the United States, which has published proposals for conversion to IFRS, permits foreign issuers to file IFRS financial statements. This is because IFRS has been established to be the preferred international accounting language compared to any other generally accepted accounting practices. Therefore information provided under the IFRS converged framework will be comparable with IFRS jurisdiction’s companies thus giving Malaysia’s companies and our capital market the recognition that they deserve.