Accounting rules are in the process of converging into a single international standard. This involves two dominant forms namely the US GAAP and the International Financial Reporting Standards. In the EU all publicly traded companies must adopt them by 2005 and many other countries either have adopted them or plan to do so in the near future. This essay aims to achieve the following objectives: (1) Providing insight into the factors influencing the adoption of IFRS (2) Providing insight into the costs and benefits of harmonization, and (3) Providing insight into the consequences of harmonization