The Implications of International Financial Reporting Standards in the United Kingdom. It needs to be at least 4500 words. The history of the European investment banking industry dates back to the 1700s when London was the major city for investment banking activity. The United States after it was founded in the late part of the 18th century attracted a lot of European entrepreneurs and investors which later enjoyed a great surplus of a diversified workforce that contributed to the creation of the richest nation in the world. The United States which took the lead in the 20th century to build the best and most sophisticated financial system with a self-regulated accounting practice based on generally accepted accounting principles (GAAP) gained early experience in this emerging industry and obtain the greatest market share of equity selling volume in the world. The rise financial rise of Europe after the 1999 creation of a common monetary unit, the Euro, among member European nations solidified the investment banking industry at the turn of the 21st century. In 2005 the European Union adopted the financial framework called the International Financial Reporting Standards (IFRS) to become the first body of nation to adopt the new system whose mission is to become the world standard for international accounting practices worldwide.
The decisions made by investment bankers depend on the information that is readily available to them in the marketplace. Financial information, particularly the financial statements of a company are essential tools used by investment bankers in the decision making process. In the United States companies abide by the generally accepted accounting principles, while in Europe companies abide by the international financial reporting standards. The utilization of each of these frameworks affects the information contained within them. .