Fujinuma, who is also a partner of Ernst & Young International, Japan, was speaking at a seminar on global accounting standards.

Comprehensive and transparent accounting standards provide information for decision-makers -- investors, regulators and governments, employees, customers and financial institutions, he said, adding that more informed decisions result in more confidence and less risk.

"Capital will logically flow to areas of less risk," Fujinuma said.

Explaining that international accounting standards were not merely tailormade for multinational companies and financial institutions, IFAC deputy president said that the standards are for all companies to follow. "Domestic companies willeventually be competing with international companies in the capital markets, and not all investors are domestic," he added.

However, smaller companies might not essentially need to go in for identical accounting treatments. "Perhaps there is room for certain alteration for small companies, where some of the more sophisticated accounting treatments are not necessary. But even in those cases, there should be an international benchmark for smaller enterprises in whatever country they may operate," Fujinuma said.

At the same time, there is a simultaneous need to evolve international auditing standards. "Once the accounting is in place, the auditing becomes an almost automatic compliment," he said.

The need to evolve internationally acceptable auditing standards, he said, was much more important than accounting standards. "The auditor's report is normally one page in length and consists of two or three paragraphs. Within the national environment, the details are usually known and understood. But an outsidermay not understand what the relevant applicable standards are. If we had international auditing standards, fully understood by all participants in the market, then there would be an internationally accepted level of credibility," Fujinuma said.

"International Accounting Standards and International Standards on Auditing are therefore the perfect compliment for each other," he said.

IFAC is actively involved in the development and promulgation of International Standards for Auditing and a comprehensive code of ethics. "High quality standards are needed, but without a commitment to ethics they are meaningless," IFAC deputy president said.