Financial reporting has the responsibility to communicate the economic condition and functioning of a company. This must be accurate, reliable and compliant with accounting principles. Effective financial reporting is essential to maintaining confidence in the economy and encouraging investors to invest. Towards the end of 2008, the financial sector around the world was becoming increasingly unstable. Lehman Brothers was declared bankrupt. Various charges against accounting standards have been made in connection with the financial crisis. Many banks around the world have valued the majority of their financial assets at historical cost, the cost at which the assets were initially purchased. These figures were not adjusted to current market values ​​and were therefore overstated in the financial accounts. The "curved loss model" has also been heavily criticized. This model required that only losses that would have a detrimental effect on future cash flows be recorded. The harmful outcome should be reliably estimated. This model did not allow the effects of future losses to be recognized, which is why losses were greatly underestimated. If these banks had valued their financial assets at cost of fair value, the company accounts would have provided a more realistic picture. of profits and losses, and perhaps the crisis would have been recognized earlier in time. Off-balance sheet standards have also been accused of covering up business losses. Off-balance sheet assets/liabilities are those that cannot be included in the balance sheet. The Financial Crisis Advisory Group has put forward the hypothesis that off-balance sheet standards could contain hidden losses, so… middle of the paper… risk factors. In response to the financial crisis, boards of directors have been advised to emphasize to corporate entities how crucial it is that the quality of data recorded for financial reporting achieves high standards. A global convergence of accounting standards is more imperative than ever, as financial markets are now global markets. A uniform set of accounting standards around the world would improve transparency, encourage efficient allocation of resources and allow for the recognition of risks. Currently, over 100 countries have adopted IFRS (International Financial Reporting Standards). The Boards suggested that economies that have not adopted IFRS should establish a practical timetable for adopting these standards. It is not only vital to converge, but also to maintain common solutions and interpretations across economies.