The economic globalization promotes the global convergence of accounting standards. More and more countries have been adopting international financial reporting standards (IFRS) since 2005. To date, there are more than 100 countries having adopted or to adopt IFRS, and the global convergence of accounting standards becomes a tendency. The global convergence of accounting standards is a systems engineering, and is not only limited in the aspect of standards setting, but addresses other entities, such as the government and relative divisions, accounting professional bodies and business enterprises etc. There inevitably are many problems, such as how to prepare, what possible problems and risks will be facing during the transitional periods, and the countimeasures the government and relative entities should take for the countries which will adopt IFRS. Therefore, it is meaningful to explore the issues.However, the international convergence of accounting standards is a specific process of public choice. Moreover, governments of different countries promote and implement the process based on their institutional backgrounds. Australia is a typical representative having adopted IFRS completely. Therefore, this paper systemeticly investigates and explains the whole Australian process of international convergence of accounting standards based on public choice theory. The dissertation focuses on the problems and risks encountered in the process related to the transitional cost, taxation stand and its effect, the bottlenecks of preparation in companies and problems of specific accounting standards in the implementation process, and analyzes the measurement taken by the government and its relative agencies, accounting professional bodies and business enterprises etc., in order to provide some references for China and other countries having adopted or to adopt IFRS.The dissertation also takes a test on the effect of international convergence of Australian accounting standards, in order to provide some supplement for empirical research. The result suggests that the value relevance of accounting information have been improved to some extent after the implementation of IFRS in Australia. Moreover, there is an increase tendency on the value relevance of accounting standards during the period from 1995 to 2006.The possible contributions of this paper could be summarized as follows:First, take public choice theory as the theory basis of international convergence of accounting standards, analyze the process of international convergence of Australian accounting standards beginning with the nature of public goods of accounting standards, impenetrate the thinking of public choice in the whole dissertation . Second, analyze the probable problems . risks and countimeasures during the international convergence process of accounting standards in a country, including the preparation, implementation and accomplishment, and try to construct the whole analysis framework, in order to provide illumination and support for the research of the issue. Third, test the effect of international convergence of Australian accounting standards,and suggest there is an increase trend on the value relevance of accounting standards during the period from 1995 to 2006.