Taurn Khanna, Krishna Palepu and Jayant Sinha largely blame “institutional voids” for the difficulty in identifying internationalization strategies. These institutional voids include the “absence of specialized intermediaries, regulatory systems, and contract enforcing mechanisms in emerging markets” (2). Khanna and her co-authors introduce a five contexts framework for anticipating these potential voids. The fifth consideration, capital markets, is where an emerging market’s “less effective legal system” proves most problematic (2). In a continued effort to synergize my studies in law with those at Heinz, I attempted to extrapolate on the legal issues presented by emerging markets. By anchoring the conversation to America’s securities laws, this discussion follows the advice of the authors by comparing my current market with emerging markets of interest. The United States’ markets are governed by, among others, the Securities Acts of ’33 and ’34 which established the Securities and Exchange Commission. The regulatory regime designed by Congress was based on a disclosure system. As executives to largely publicly traded corporations know all too well, there are a variety of filings which a company must submit to the SEC to provide adequate disclosure about their business operations (such as the annual Form-10K and Quarterly Form 10-Q). Under federal law, companies release quarterly earnings reports, which must not only be complaint with Generally Accepted Accounting Principles (G.A.A.P.), but they must also be verified by a third-party auditor like Deloitte. This robust system maintains market efficiency by ensuring that every market participant can invest knowing any and all material information about the company. In contrast, Khanna and his co-authors explain that companies and shareholders alike cannot rely so heavily on information obtained from less sophisticated markets (12). With a lack of “investment analysts, merchant bankers, or venture capital firms,” potential investors cannot access the critical information necessary to “assess the creditworthiness of other firms” or make other necessary determinations (12). Globalization is the “most critical challenge facing” executives today and that fact manifests itself in the development of international efforts to harmonize the financial statements standards and disclosure system. As you may imagine, this is a dauntingly complex endeavor that would take countless years to complete. The largest challenge will be the “unwillingness of the different nations involved in the process to collaborate based on different cultures, ethics, standards, beliefs, types of economies, political systems, and preconceived notions for specific countries, systems and religions.” The crony capitalists of emerging markets are incentivized to resist this harmonization so as to limit the companies’ liability and protect them from prosecution for fraud. Nevertheless, in recent years the economic and financial meltdown, the Sarbanes-Oxley Act and globalization taken together have “exerted pressure on a number of countries, including the United States, to eliminate the gap between” the two standards. In response, the SEC has taken action to encourage the convergence of the U.S. and IFRS standards” by adopting some IFRS standards. The harmonization of these standards would provide “renewed clarity, possible simplification, transparency and comparability between different countries on accounting and financial reporting”. These standards would also increase the capital flow internationally and reduce the costs associated with entering foreign exchanges.” Business is stifled when foreign investors cannot trust their joint partners to respect the agreement or even local law (12). In the U.S., the board of directors, officers and partners have a fiduciary duty to their co-investors. Investors can have peace in mind knowing that they are protected by a duty of care not to act negligently and a duty of loyalty to present all related business opportunities. This transparency and trust fosters business relationships and eventually investment. The harmonization of financial accounting standards is the first step in fostering this healthy business climate with emerging markets. As this movement progresses, executives will confront less and less institutional voids and therefore will have more flexibility in designing and implementing their internationalization strategies.