Ericsson, a Swedish telecommunications firm founded by Lars Magnus Ericsson, is one of the world's largest suppliers of mobile and

mobile equipments and provides total solutions, ranging from systems and applications to services and core technology for the wireless communication. It has been in existence since 1876 and presently has its standing in more than 140 countries of the world with a world market share of around 35%. The company's headquarters are located in Stockholm, Sweden (Ericsson, n.d.). Like any other organization, Ericsson also follows some accounting standards and practices, which are influenced by some of the factors. The following are some of the examples of factors that had an influence on the accounting standards and practices of Ericsson: The organization conducts its audit on the basis of the auditing standards in Norway, which are in accordance with the Norwegian Act on Auditing and Auditors. This standard requires that the company plans and does its audit by assuring that the financial statements are totally free from material misstatements (Opera software ASA Annual report, 2002). It makes sure to fulfill the obligation of the registration and proper documentation of the accounting information that is demanded by the accounting standards, principles, practices and laws of Norway. Ericsson also ensures that the audit done within the company comprises of the review of the financial affairs and internal control system of the company. The aspect of compliance with the laws and regulations also influences the accounting standards and practices of the company. The report of the financial statements and the going concern assumption of the company are in consonance with the actual financial statements of the company (Opera software ASA Annual report, 2002). The accounting standards of Ericsson are also influenced by the concept of conservatism, which is one of the oldest and most influential concepts of valuation in accounting. It says that in case of doubtful situations, the companies should opt for the accounting alternatives that possess the least likelihood to overstate the assets and profits of the company (Ericsson reports significantly reduced operating expenses, 2002).

As the CFO of Ericsson, I would strongly recommend that the company should adopt the full IFRS (International Financial Reporting Standards) as adopted by the European Union. It is because of the fact that the company operates internationally and a compliance with the standards of IFRS will help it to make its financial statements easier to compare with the statements of the company across countries, with the competitors across the industry sector and beyond, along with improving the quality of disclosures in the financial statements (EU Implementation of IFRS and the fair value directive, 2007).

The usefulness of the adaptability to the IFRS can be identified by having a look at the results of a survey report assessing the impact of IFRS on the financial health of the nations under the European Union. The following were the results of the survey report: The adaptability of IFRS has made the understanding of the financial statements easier, which was very complicated earlier. The companies have also seen that their dialogue with the investors, creditors, and other stakeholders and with the other companies in the marketplace has increased rapidly after the introduction to IFRS. Around 63% of the investors in European Union believed that the application of IFRS had made an improvement in the overall quality of the financial statements published by various firms (EU Implementation of IFRS and the fair value directive, 2007). The preparers of the financial statements also stated that the fund managers and analysts also found it easier to make their decisions for the companies after the introduction of the IFRS. Therefore, by looking at the positive impacts of introduction of International Financial Accounting Standards (IFRS) by the European Union, it can be very easily said that Ericsson should also adopt it. It will lead to an improvement in various aspects relating to its finance and accounts, which will ultimately make the activities of the company smooth across the globe.

References: Ericsson reports significantly reduced operating expenses. (2002). http://www.ericsson.com/news/877082 EU Implementation of IFRS and the fair value directive. (2007). Financial Reporting Faculty. http://ec.europa.eu/dgs/internal_market/docs/evaluation/2007eu_implementation_of_ifrs.pdf Opera software ASA Annual report. (2002). Opera Software. http://media.opera.com/media/finance/2002/ann_rep_numbers.pdf Ericsson. (n.d.). http://www.ericsson.com/thecompany