Global accounting changes, valuation and imported services: Latin America 2000-2015

Abstract

This article investigates the relationship between new accounting rules made worldwide  and illicit financial flows (IFF). It focuses on the implementation of the international Financial Reporting standards, called IFRS in Latin American countries. Given the importance of accounting issues in multinational operations, which in turn affect illicit financial flows, changes in imported services accounts in the balance of payments are studied. The new accounting standards had an economic impact on the other business services in the balance of services that increased substantially in almost all countries. This affects the balance of services and the current account of the balance of payments. Uncritical implementation of these standards even for SMEs benefited large companies and harmed the
external accounts of Latin American countries, favoring FFIs and worsening external constraints.