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initiation of a process that ultimately led to the creation in 1973 of the

International Accounting Standards Committee {"IASC'1.~/

In the decades that have gone by since the need for international

accounting harmonization was first recognized, the forces of

internationalization, which had only begun to be felt in the 1960's, have

struck with a vengeance. For example, compare what has happened

between 1975 and 1989 just in the international financial markets. In

1975, transactions in U.S. securities by foreign investors and

transactions in foreign securities by U.S. investors were estimated to

aggregate about $66 billion. By 1989,this figure had increased by more

than 80 times to a staggering $5.4 trillion. 4/

Unfortunately, the movement towards harmonization of accounting

standards has not kept up with the rate of increase in international

economic activity, despite the recognition in the 1960's of the essential

and

urgent

need

for

harmonization.

For

example,

the

U.S.

has

not

recognized any international accounting standards, or any other

country's national accounting standards for that matter. Furthermore,

for a foreign company to offer securities in the U.S. or to list its

securities on a U.S. exchange or on NASDAQ, it must reconcile its

3/

4/

See id. at 144-45. SEC Office of Economic Analysis. 2

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