Reduction in information cost to economy: Today, there are many opportunities for companies to trade across border and raise capital globally. If the company is following local GAAP, the foreign investors perceive the presence of accounting risk in such statement. Accounting risk refers to risk involved in analyzing and interpreting financial statement that follows different GAAP (Epstein 2009 p.26). Thus, the financial statement prepared in different GAAP, affects the financial ratio, which is a key factors in lending decision by bankers and for compliance with debt covenant. In such cases, the companies restate its financial statement as per local GAAP of foreign country, so as to fasten the process of raising funds. If IFRS based standard are adopted, capital market regulators must be aware of only one set of accounting standard and the companies will experience efficiency in raising capital and reduced information processing cost (Barth 2008 pp.1159-1179).