Expectedly, one of the main issues discussed by international securities regulators when they met in Mumbai this week was the harmonization of accounting standards. There is a surfeit of accounting standards across the world right now, which is an anomaly in a world where capital issuance and investments are global activities.
India needs to move fast to embrace the International Financial Reporting Standards (IFRS). This will lead to two different benefits. The major one is that access to global capital markets will be easier. The minor one is that local accountants will be trained in a global audit standard, and they can play the outsourcing game.
But it would be a mistake to assume that the benefits are unidirectional. Countries such as Britain, which use IFRS, would benefit by the spread of global standards to India and China, because that means companies in these countries will find it easier to list in London.