Which of the following is NOT correct about parallel accounting?

Parallel accounting is a concept that allows an organization to maintain multiple sets of books to accommodate different accounting frameworks, such as International Financial Reporting Standards (IFRS) and local generally accepted accounting principles (GAAP).

The assertion that all parallel ledgers must follow the same international accounting principles is incorrect. In reality, parallel ledgers are specifically designed to cater to differing accounting standards, enabling organizations to align their financial reporting with diverse regulatory environments or internal requirements. This flexibility is crucial for multinational companies operating in various countries, as it allows them to present financial information in a manner that is relevant to different stakeholders.

Moreover, parallel accounting enhances reporting flexibility and provides alternative views of financial data, making it valuable for internal analysis, decision-making, and compliance with various reporting obligations. This adaptability is at the core of why organizations implement parallel accounting systems.