Due to the material differences in accounting policies and standards, say accounting experts, relative evaluation of companies across countries have become extremely complicated, causing serious problems to transnational corporations.

In an effort to evolve a common set of accounting practices, IBC Gulf Conferences of Dubai is organising a three-day seminar --- Global Accounting Standards '98 --- alongwith the Institute of Chartered Accountants. The conference, to start on December 1, will aim at bridging the gap between Indian and International Accounting Standards.

"To facilitate sound investment and credit decision making, the world needs a single, uniform, globally applied and enforced set of financial accounting and reporting," says Paul Pacter, member of the International Accounting Standards Committee.

According to accounting experts, the differences in accounting standards pose serious problems for multinational companies who are required to comply with different accounting policies in different countries, which in turn restrict the market value of shares. The accounting diversity not only means additional costs for financial reporting but also causes difficulties especially for multinational corporations.

"Diversity in accounting is so acute that it sometimes causes financial results of the same company reported under different standards to be quite anomalous," says Abbas Ali Mirza, director of Pannell Kerr Forster.

"A case in point," he added, "is the German industrial giant, Daimler Benz AG which sought listing of its shares in the USA in 1993 and ended up reporting a massive loss of $1 billion under American Standards (US GAAP) when in fact it had reported a profit of $370 million under its own national (German) standards."

The seminar to be held next month, which will bring together experts from the international accounting fraternity, will dwell on international accounting standards with special reference to American, British and Indian standards. It will also examine the current and future requirements of a single and uniform set of accounting standards globally.

The event will also review key topics that concern producers and consumers of financial information, and provide an update on the latest developments in the drive towards global accounting standards.

As the movement towards international accounting harmonisation gathers momentum, MNCs have already begun to adopt either International Accounting Standards or the US GAAP. The growth of international capital markets and volumes of cross border transactions are driving the process of ushering in uiformity of accounting principles.

Besides international accounting stalwarts like Paul Pacter and Abbas Ali, the seminar will be addressed by eminent speakers Tsuguoki Fujinunia, vice-president of the International Federation of Accountants, David Perry, technical director of the Institute of Chartered Accountants of England and Wales. The Indian speakers will include eminent chartered accountants YH Malegam, NP Sarda, Jayant Gokhale and Mukund Chitale.