Journal ofAccounting Edumion, Vol. 1I, pp.177-184, 1993 0748-5751/93 $6.00 + .

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HARMONIZATION OF INTERNATIONAL
ACCOUNTING STANDARDS: IS IT POSSIBLE?
Valerie Sutton
UNIVERSITY OF HOUSTON-CLEAR LAKE

INTRODUCTION
The concept of harmonizing international accounting standards is not a
new one. As long ago as 1904, the idea was advocated at the First Interna-
tional Congress of Accountants (Brunovs & Kirsch, 1991). It is generally
agreed that recent expansion of the global economy has given the issue new
urgency. This paper will review current harmonization efforts and some of
the motivating factors behind them, as well as some major impediments to
the harmonization process.

WHAT IS HARMONIZATION?
An understanding of what is meant by harmonization in accounting is
an important starting point. Just as musical harmony is not necessarily
synonymous with unison, so harmony in accounting is not considered the
same as uniformity. Harmonization is a process, rather than a state, that
has been defined as “a movement away from total diversity of practice”
(Tay & Parker, 1990, p. 73). The same writers distinguish harmonization
from standardization, which they define as a movement towards a state of
uniformity, though they place both processes along the same continuum.
Kirkpatrick (1987) traces harmonization’s stages from compatibility,
through comparability, to eventual conformity. At the present time, it is
comparability of financial statements that seems to be the aim of the har-
monization movement.

THE IASC AND HARMONIZATION

Although several organizations, including the United Nations (UN), the
European Community (EC), and the Organization for Economic Coopera-
tion and Development (OECD), are interested in the harmonization of
accounting standards, the leading standard-setter has been the private sec-
tor International Accounting Standards Committee (IASC). Founded in
1973, and composed of representatives of 106 professional accounting bod-
ies from 79 countries, the IASC had issued 31 standards as of September
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