Difference Between The Convergence Of Gaap With IFRS

Difference Between The Convergence Of Gaap With IFRS
The Convergence of U.S. GAAP with IFRS: A Comparative Analysis of Principles–based and
Rules–based Accounting Standards
Dr. Oris Guillaume 1 and Dr. Denel Pierre 2
(Shorter University1, USA ; Argosy University2, USA)
Abstract
The Financial Accounting Standard Board (FASB) and the International Accounting Standard Board
(IASB) have been working jointly toward the convergence of the U.S. generally accepted
accounting principles (GAAP) and the international financial reporting standards (IFRS). However,
several arguments still exist as to whether or not U.S. companies should adopt or converge with
IFRS. This qualitative study identified the differences noted between rules–based and principles–
based accounting, and discussed the impact of these accounting standards on financial reporting.
Additionally, several resources were analyzed to understand the path to convergence and the future
state of IFRS. The examination of information regarding the transition towards one single set of
accounting standards led to the ... Show more content on Helpwriting.net ...
64). Research also indicated that although International Financial Reporting Standards (IFRS) are
used as the method of financial reporting by over 15,000 companies outside of the United States, the
debate over whether the public companies based within the United States should adopt or converge
with IFRS remains. Callaghan and Treacy (2007) agreed that significant strides have been made
towards understanding the differences between U.S. GAAP and IFRS but, there seems to be
hesitation within U.S. public companies to migrate towards fully adopting a principles–based
method of accounting. The researchers will use an exploratory qualitative research method that
compares rules–based and principles–based accounting
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The Sarbanes-Oxley Act (SOX) Act
Introduction: "... The era of low standards and false profits is over; no boardroom in America is
above or beyond the law." (Bumiller) By way of landslide votes in both the U.S. House of
Representatives and the U.S. Senate, in July of 2002, the Sarbanes–Oxley (SOX) act was approved.
To understand the cause and effect of this landmark legislation, the SOX act warrants exploration of
the events leading to its creation, the details of the act itself, and the impacts on responsibilities to
both firms' management teams and their auditors. While the implementation of Sarbanes–Oxley has
been positive for investors, company managers and auditors, specifically, are bearing the burden of
complying with SOX through significantly greater responsibilities. ... Show more content on
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Andersen's reputation was so tarnished from the revelations of the conspiracy that no public
company would have Arthur Andersen as an auditor. Andersen's practice was disbanded and has
now become defunct with only a handful of employees still working for the firm as they continue to
wind down the business. In July of 2002, not long after the exposure of the Enron accounting fraud
and bankruptcy, WorldCom Inc. filed for Chapter 11 bankruptcy protection. WorldCom Inc.
admitted that the company had fraudulently misclassified over $3.8 billion in payments for line
costs as capital expenditures rather than current expenses (Beresford). The company's executives
perpetrated this fraud, grossly overstating revenues by improperly transferring billions of dollars in
line cost expenses to asset accounts over a number of years. These transfers reduced WorldCom's
reported line costs and increased pre–tax income by $7 billion overall (Beresford). These two
disgraceful accounting frauds by senior and executive managers at Enron and WorldCom, as well as
similar events that took place at other public companies in the early to mid–2000s and the Arthur
Andersen conspiracy were the genesis for the call of accounting reforms and auditor independence
that would ultimately become the

Societal Values And Culture Affect A Company 's Accounting...
Basing from the question, how do societal values and culture affect a company 's accounting
system? The answer would be about the integrations of norms and interests that contemplates about
the ability to adjust with the traditions and practices of other companies. Societal values can be in a
form of policies that may have been unique to an operating institution, which is adapted by the
whole society. When it will be integrated, it transforms one unique culture into a diversified forms
of cultural practice that impacts the accounting system of the company as indicated by Nobs (1998).
Societal values and culture affects a company 's accounting system because it pertains to the
comprehensive changes in the technology, process, ideas, commodities, and services that are more
effective to the use of the society particularly to bring out positive impact to improve the business
process, infrastructures, government, technologies, and all other vital parts of a certain nation. In
this manner, the presence of innovation represents positive transformation that improves the quality
of life for the humanity for attaining their goals successfully in a specific period of time specifically
across combined companies. Business perspective, globalization is an effective process because it
helps all kinds of public and private institutions have the capability of transforming innovations into
economic materials that are essential to improve the integrity of the operating enterprise. In the

A Brief Note On International Financial Reporting Standards
International Financial Reporting Standards
BA 321
Christopher McGee
February 26, 2017
Introduction
In the world of business, there are many aspects that go into making a company run smoothly. One
of the main departments of every company is the accounting department. Accounting is all about
keeping up with the financial records. The accountant can't just keep up with the records whatever
they choose; there are standards that have to be followed. The standards such as how to document,
how to measure and recognize transactions for their financial statements, help potential investors see
how their company is performing. In the United States those standards are called Generally
Accepted Accounting ... Show more content on Helpwriting.net ...
The IFRS operates in many parts of the world already, such as the European Union, and many
countries in Asia and South America.
Similarities and Differences with GAAP
Some people in 2005 examined a sample of European Union firms that voluntarily adopted the
international accounting standards as well as the United States Generally Accepted Accounting
Principles. They examined whether the firms who adopted the practices had lower levels of
information asymmetry, a much cited benefit of using more transparent financial reporting, than
non–adopters. The examiners also studied the three proxies for information asymmetry: analyst
following cost of equity, capital, and uncertainty among analysts and investors. They documented a
positive effect of international accounting standards and the U.S generally accepted accounting
principles adoption (Li Li, 2014). This research shows that there are some similarities between the
two standards. The frameworks for both methods are similar in the way certain objectives of
accounting practices are the closely related. Both methods use an income statement, balance sheet,
and statement of cash flows. Accrual–base accounting is also used by both standards as a way to
prepare their financial statements. Meaning they record revenues and expenses when it is incurred
(Maz, 2016)
Differences
The major difference between the two standards is the IFRS uses principle–based

Ifrs Reporting
Issue:
1a) Are the disclosures in the Swiss annual report really unnecessary?
1b) what social, economic, and institutional factors in Switzerland Might be causing the inclusion of
these disclosures?
1c) Describe on of the differences in financial reporting between a Swiss company and the reporting
in another country?
Facts:
Rob Carpenter senior manager at a prestigious accounting firm, recently transferred to the
international division of acquisition and mergers. Mr. Carpenter was recently asked to make a
recommendation regarding Nestle. Mr. Carpenter unfamiliar with the accounting in Switzerland has
realized substantial differences between Swiss and U.S. accounting standards. Surprisingly, there are
many "unnecessary" details in ... Show more content on Helpwriting.net ...
The reason for this kind reporting is largely due to the nature of their main capital provider, the
bank. The bank is not necessarily concerned with their positive future outlook, they are likely more
concerned with their debt to income ratio, equity, and liabilities. This kind of accounting information
gives a better estimate if the company will be able to sufficiently meet their new obligation in the
form of bank financing.
In Switzerland, a company such as Nestle dedicates a certain amount of information in its annual
report to the value it generates to society at large. Surprisingly, their annual report seems to lend
itself to the practices of equity–oriented countries likely due to its international presence and
immense exposure to the United States. In any event, their annual report discloses their compliance
with applicable laws and international conventions in order to ensure the activities protect the
environment (Nestle Annual Report 2010, p. 8). Furthermore, Nestles' report includes
communication reemphasizing their dedication and efforts in the issue areas of human rights, labor
practices, the environment and anti–corruption.
The practice described above may be indicative of large blue–chip companies in Switzerland which
is found common amongst members of the SMI Family, which is the best–known SIX Swiss
Exchange index family, comprises the 50 largest

Financial Statements From Different Parts Of The World...
History of IASB Phillip Abbey Advanced Accounting In 1962, many at the Eighth International
Congress of Accountants voiced the need to be able to compare financial statements from different
parts of the world with a common set of standards. The American Institute of Certified Public
Accountants (AICPA) published a book on the various accounting standards and practices in various
countries. The AICPA also thought steps should be taken towards the idea of a single body of
accounting principles by reactivating a committee on international relations (AICPA 1964). The
AIPCA sought to foster the development of auditing, accounting, and reporting standards on an
international basis. Wilkinson (1965) was one of the early authors to define accounting uniformity
as "each company presents only one set of accounts for all investors, of whatever nationality." This
idea, along with many others would eventually culminate in the establishment of the International
Accounting Standards Committee (IASC) some years later. The 1970s saw the creation of the first
international accounting standard committee and began to see voluntary cooperation between FASB
and other international accounting governing bodies. Following an agreement by the AICPA and
eight other international counterparts, the IASC was founded in London on June 29, 1973. The
Board of the IASC was comprised of nine delegations of three members each that would attend
three Committee meetings. The purpose of the IASC at its

Ifrs Of The Us And The World : Political And Economic...
IFRS in the US and the World
Political and economic forces shape accounting. The increased worldwide integration of politics and
markets raises the necessity for integration of financial reporting standards. The integration is driven
by the reductions in the costs of information processing and communication. International Financial
Reporting Standards are a common business affair language in the globe for easier comprehension
and comparison of company accounts across international boundaries (AICPA). The standards are
issued by the International Accounting Standards Board. The IASB is a United Kingdom body that
was established in 2001 and is based in London. The historical cost paradigm authorizes the IFRS
except IAS 29 and AFRIC 7, which ... Show more content on Helpwriting.net ...
Most of the economic allies of the US have moved to IFRS, and it has become a major challenge for
both the trading partners and internal companies.
GAAP and IFRS are significantly different in various ways. GAAP is based on rules and prefers a
risk–and–reward model. On the other hand, IFRS is based on standards and prefers a control model.
The meaning of this is that GAAP makes decisions as a result of literature and research. IFRS, on
the other hand, makes the decisions based on patterns that lead to the formation of facts.
Categorization costs are considered as capitalized in IFRS and as expenses in the GAAP. There are
also significant differences in the valuation of assets, revenue recognition, assessment of impairment
of long–lived assets, correction of errors and financial statement presentations (Epsten and Eva 40–
60). However, they are both sets of complete financial statements that require the companies to use
the same policies and principles of accounting.
The Securities and Exchange Commission has time and again stated its commitment to shift from
GAAP without any forthcoming efforts (Street 258). Despite the slow pace as compared to the other
countries that are rapidly changing, the change has become apparent. The SEC allowed financial
statements from foreign companies listed on the domestic stock exchanges with IFRS. However, the
general approach of the United States to the matter has been of a cautious nature. The SEC adopted
a

The Accounting Systems of the United States and France
Why do we study comparative accounting? Countries around the world have different aspects such
as taxation, legal systems, culture and colonial influence that differ the way accounting is reported.
Ultimately the need for fair presentation is the final objective to comparative accounting. Thousands
of years ago when accounting was first practiced, each country practiced financial reporting
according to the power and strengths in their country, regardless of how accounting was reported in
neighboring countries. Nowadays, because the world is becoming more globalized and harmonized,
standard–setters feel the need to report their accounting in a uniform way. The International
Accounting Standards Board [IASB] was formed as a non–for–profit ... Show more content on
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The accounting system in the US was strongly influenced by the SEC as opposed to a governmental
influence. The SEC sells, exchanges and trades securities, protects investors while maintaining fair,
orderly and efficient markets and ultimately facilitates capital formation (Pereira, 1992, p17). The
US has the largest and one of the most important, stock exchanges in the world – the New York
Stock Exchange located on Wall Street in New York City. This makes the US a huge market for
investors world–wide. All investors would like to have access to certain facts about an investment
before buying it and while holding it. In order to achieve this, the SEC requires all public firms and
companies to disclose meaningful financial and other information to the public, to follow GAAP
(SEC, 2007). Thus, any company that wishes to be a market in the SEC's securities must register
with the SEC. For those companies with foreign registrants, the SEC requires them to either report
under US GAAP or to provide reconciliations to US GAAP (Nobes, p146, 2006). The SEC also
requires public firms to follow GAAP in order to be audited. It is quite evident that most of
American accounting is rule based, not government based. According to Nobes' textbook,
Comparative International Accounting, the commission since its inception has intended to limit the
exercise of its accounting standard–setting authority to a supervisory role, permitting and
encouraging the private sector, currently

Relationship Between Iasb and Fasb
Relationship Between IASB and FASB
In 1973, the private sector International Accounting Standards Board (IASB) was formed. The IASB
is a natural extension of a global market that has been evolving over the last three decades. The
IASB formulates and publishes accounting standards to be observed when presenting financial
statements and promote their global acceptance. As an overarching mission, the IASB works to
improve and harmonize accounting standards, regulations, and procedures as it relates to financial
statements. IASB standards provide a reference model and set of examples for financial reporting in
developing countries. The IASB has no authority with the Financial Accounting Standards Board
(FASB) or the Securities and ... Show more content on Helpwriting.net ...
The "Academic Catalog" (2012) website states University of Phoenix, Master of Science in
Accountancy provides the breadth of knowledge required for a professional accountant. One of the
core principles of the program is to help students master relevant accounting theory and principles
relevant in a wide range of real–world issues and problems encountered in the accounting
profession. The professional life of an accountant may or may not include the pursuit of the
Certified Public Accountant (CPA) examination. Other options in the field include accounting,
budgeting, and auditing. The MSA program addresses the goals of the AICPA Vision Project for
leadership, vision, professional values, communications, technology skills, and critical thinking.
Although not stated by the university, I believe the foundational skills listed above are key to long–
term success for anyone in the accounting profession independent of their technical knowledge of
financial accounting standards ("Academic Catalog", 2012). According to "Dean 's Letter" (2012), "
We designed the Master of Science in Accounting (MSA) program to meet the expectations of the
National Association of State Boards of Accountancy (NASBA) proposed education model. Each
state may set its own requirements that you must meet if you plan to take the Certified Public

The International Financial Reporting Standard
There is no surprise that the United States is taking its precious time conforming to someone else's
standards. For years, teachers and engineers from around the world have been inquiring why the
United States has not switched to the metric system in its classrooms and stop teaching the old
method of measurement. After the long fight to change the standard, teachers now take time to
introduce the subject in class. Mirroring the struggle to get the metric system taught in classrooms, it
is now time for the United States to make a decision in the accounting profession. The International
Financial Reporting Standard was supposed to be the universal standard of accounting across every
nation by the year 2015, but the United States Security and ... Show more content on
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The talks about convergence began in 2002 between the International Financial Standards Board and
the Financial Accounting Standards Board. In 2005, the Security and Exchange Commission
acknowledged that the day would come when the International Financial Standards would take
precedence over the United States GAAP. In the year 2007, it was decided that foreign companies
would have the ability to file financial statements in the United States without reconciling the
statements to the United States GAAP. This statement modeled the first step for the United States
toward accepting the International Accounting Standards. This changeover would give professionals
and the Security and Exchange Commission time to inspect the financial statements in respect to the
International Accounting Standards and with the Generally Accepted Accounting Standards. After
this moment in time, the Security and Exchange Commission issued a road map to present a
blueprint of how the convergence would take place. It stated that in between the years of 2009
through 2010, a Security and Exchange Commission staff work plan would be developed to work on
the substantive details of the convergence plan ("2015–IFRS in the," 2014). In the middle of
development a Security and Exchange Commission policy statement would be issued to announce
more understanding of the IFRS and how it will replace the Generally

Ford vs Toyota Essay
Ford vs. Toyota
Ford Motor Company is the second–largest automobile company in the world. Ford's main focus is
automobiles; however, they also operate in Ford Credit and Hertz Corporation. Ford also has
controlling interest in Mazda Motor Corporation. Ford was established June, 1903; in an old wagon
factory in Detroit Michigan. In 1903, Ford began production on a two–cylinder, 8 horsepower called
the Model A. They produced a total of 1,708 of these cars in their first year of operation.
Toyota Motor Corporation was Japan's largest car company. Toyota ranked the world's third largest
by the year 2000. The company could produce near five million car units annually in the 1990s and
controlled approximately 10 percent of the global market. ... Show more content on Helpwriting.net
...
This form tends to be used more in the Japanese forms than in U.S. The fact is that there are many
differences between U.S, and Japanese accounting practices as well as the management accounting
practices. Management accounting accounts for only one component of a company's total
management system and the role of that system cannot be completely understood without
considering the organizational context and the goals that are to be achieved.
United States companies such as Ford Motor Company tend to put more emphasis on manufacturing
costs after the fact. The Japanese tend to stress the proactive use of managerial accounting to
promote the success and innovation of the products that are introduced. The accounting system used
by the two is similar in some ways and differ in many others. The key area where they tend to come
together is the bottom line which is where the final numbers are clear. Some feel as though to further
shed light on how U.S. and Japanese companies differ, they must consider the goal, context and the
process of the accounting practices.
When visiting Toyota's website, the same flashy graphics are displayed as their American
competitor's website, Ford. Looking deeper for differences in generally accepted accounting
principles (GAAP) between Toyota and Ford, the financial results for both companies can be viewed
online. The Ford Motor Company's annual report and financial

Financial Statements Of The Firm 's Foreign Subsidiaries
Case 2: Ruckman, Inc. Chris Gilmore's first week at Ruckman, Inc., provided him with quite a
difficult task: to review the financial statements of the firm's foreign subsidiaries, prepare the
consolidated statements, and finally convert them from the United States' Generally Accepted
Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS). Familiarizing
himself with the company and his task at hand, he discovered that the job was both time consuming
and convoluted, with the U.S. Securities and Exchange Commission (SEC) requiring converting
companies to begin the process years in advance, including the presentation of the last three years of
balance sheets. To complete his task, Chris has to understand the ... Show more content on
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Furthermore, the idea of accounting standards made accountability for firms' finances simpler, as
numbers could more accurately be tracked, making issues like stocks and taxes less convoluted from
company to company. In theory, if companies' numbers were not comparable, then the stock markets
would be extremely inefficient or simply obsolete. Following the Stock Market crash around the
1930's, citizens lost faith in the market and the overall economy. Because of this, government
leaders needed to rebuild their peoples' hope, and responded by creating the SEC – an organization
with the responsibility of regulating financial practices among publically traded companies. To do
so, they enlisted the aid of the American Institute of Certified Public Accountants (AICPA). A few
years after their partnership with the Commission, the two collectively created the Committee on
Accounting Procedure (CAP), which later evolved to become GAAP. Since then, The Generally
Accepted Accounting Principles has been the primary method of accounting in the United States.
These principles were initially developed to protect American companies, investors, and other
stakeholders, with their main objective to provide information that could impact company decisions
in the future. Determined and then run by the country's accountants, the method worked well
following World War II, when the United States unquestionably became a

Accounting Scandals Of The United States
In the last two decades, accounting scandals have become a truly global phenomenon. These
scandals include the 2001 Enron scandal in the United States (Chaney and Philipich, 2002), the
2002 ComROAD scandal in Germany (Weber et al., 2008), the 2005 Kanebo issue in Japan (Skinner
and Srinivasan, 2012), and the 2009 Satyam downfall in India (Bandyopadhyay et al., 2014).
Moreover, these and other scandals involved the world's most highly reputable audit firms, such as
Arthur Anderson, PwC, and KPMG. Although auditors can be sued for negligence in the United
States, such suits are rare or effectively absent in Japan, Germany, and India. With the biggest, most
reputable audit firms failing in both high–litigation and low or no–litigation countries, it is
appropriate to revisit the "reputation rationale" (DeAngelo, 1981) for audit quality and investigate to
what extent reputation concern provides incentives for auditors (especially the large reputable ones),
using a formal model of reputation formation.
High–quality auditing is a central component of corporate governance. Yet the factors that promote
such auditing remain an open question. The two forms of incentives that induce quality in audits are
litigation/insurance and reputation. Litigation incentives work in a straightforward way by making
the auditor liable for the opinion issued. Reputation, on the other hand, is an indirect mechanism and
begs the question of whether it is sufficiently powerful to motivate high–quality

Generally Accepted Accounting Principles
Generally Accepted Accounting Principles (United States)
In the U.S., generally accepted accounting principles, commonly abbreviated as US GAAP or
simply GAAP, are accounting rules used to prepare, present, and report financial statements for a
wide variety of entities, including publicly–traded and privately–held companies, non–profit
organizations, and governments. Generally GAAP includes local applicable Accounting Framework,
related accounting law, rules and Accounting Standard.
Similar to many other countries practicing under the common law system, the United States
government does not directly set accounting standards, in the belief that the private sector has better
knowledge and resources. US GAAP is not written in law, although ... Show more content on
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This principle allows greater evaluation of actual profitability and performance (shows how much
was spent to earn revenue). Depreciation and Cost of Goods Sold are good examples of application
of this principle.
Disclosure principle. Amount and kinds of information disclosed should be decided based on trade–
off analysis as a larger amount of information costs more to prepare and use. Information disclosed
should be enough to make a judgment while keeping costs reasonable. Information is presented in
the main body of financial statements, in the notes or as supplementary information
[edit] Constraints
Objectivity principle: the company financial statements provided by the accountants should be based
on objective evidence.
Materiality principle: the significance of an item should be considered when it is reported. An item
is considered significant when it would affect the decision of a reasonable individual.
Consistency principle: It means that the company uses the same accounting principles and methods
from year to year.
Prudence principle: when choosing between two solutions, the one that will be least likely to
overstate assets and income should be picked (see convention of conservatism).
Generally Accepted Accounting Principles (UK)
The Generally Accepted Accounting Practice in the UK, or UK GAAP, are the overall body of
regulation establishing how company accounts must be prepared in the United

The Accounting Principles Of Accounting
Introduction
Measurement of accounting elements is the most significant factors that entail the process of
preparing financial statements. Accounting measurements presents the vital economic objectives for
various accounting entities (Horngren, 2009). Fair value refers to a financial reporting approach
operating under the accepted accounting principles (GAAP). This accounting method is also referred
to as Mark–market accounting practice. In united Sates majority of the public and private companies
uses fair value accounting approach to measure and report value chains of various business assets
and liabilities calculated from the actual or the estimated current fair market prices (Barth, 2014). It
is evident that any changes that occur in ... Show more content on Helpwriting.net ...
Likewise, fair value entails the replacement and also the cost of substitutes. For instance, the fair
value of an asset is expressed as the given amount at which a specified asset is bought and sold in
the current transaction involving willing parties, other than in the process of liquidation. On the
other side, when dealing with a company's balance sheet, the fair value of liability is the state at
which the liability is likely to be incurred or settled in the agreed transaction between various
willing parties. In this case, if the fair value is available, the quoted market price in the given active
market remains the best evidence of the fair value, and it is usually expressed as the basis for the
measurement. In any active market, fair value is more liquid with small bids which makes the
difference between the sell and the product purchase prices. Fair value is different from the carrying
value in that; the carrying value is expressed as the current asset or liability value commonly based
on the company's balance sheet, while the fair value of an asset or liability is mostly expressed as
the market–to–market value different from the carrying value which accounts to the figures of the
particular asset on the company's balance sheet. Estimates of company's fair value are made using
either the quoted market price or using the best information available in a given circumstance
(Barlev & Haddad, 2013).). If the two factors are not available,

Essay about Solving the Foreclosure Crisis
I. Introduction
The current financial crisis was triggered by subprime mortgage in the United States. This lead not
only to a large amount of mortgage default but also other problem suc as, credit card and store loans.
The result was huge losses in financial institution in the United States Europe and Asia, because of
financial liberalization had enabled the transnational transaction of "bad" assets. Some people argue
that this crisis was aggravated by Fair Value Accounting because it prices an asset based on its
current value. Which means, the financial institution show the current prices of their asset in
financial statement. In this crisis, almost all of assets values are decreased, then people have less
confidence about the financial ... Show more content on Helpwriting.net ...
Then the crisis has spread to Asia especially in Japan, Korea, China, Singapore, Hong Kong,
Malaysia, Thailand, and Indonesia. Some experts believe that the problem was triggered by mark–
up housing price in the United States. Also, the U.S. Federal Reserve (the Fed) had less prudent to
stabilize the financial system since many years. This situation is motivated by a hope to keep up the
demand for residential properties and then banks in the United States distributed the housing loans
to people who do not have adequate financial capacity such as, the people who do not have income,
job and asset. Furthermore, these housing credit made into investments tool to attract the investors
such as banks, securities firms and insurance. Unfortunately, there are a lot of unpaid loans in a large
numbers. As a result, banks have difficulties to pay investors who need to withdraw money from
banking products while prices are still high. It makes the market structure to be disturbed because
the interrelated of investment product.
II.1.2. The Effect According to Mcsweenet (2009, p. 835–848) , in the United States, there are a lot
of large financial institution announced the bankruptcy such as, Lehman Brothers, Merryl Linch,
Citigroup, AIG, and other large financial institution. Also, some big companies in real sector

Fasb and the Standard-Setting Process
Running Header: THE FASB
FASB and the Standard–Setting process
Name:
Institution:
Course:
Tutor:
Date:
Abstract Financial Accounting Standards Board (FASB) is a seven member board that consists of
accounting professionals who establishes and communicates financial accounting and reporting
standards known as generally accepted accounting principles (GAAP) in United States. The
standards' quest is to govern the preparation of the corporate financial reports and hence ensuring
transparency, credibility and understandability of the financial statements. To achieve these, there is
need to set guidelines that create uniformity in the preparation of the statements across the region. In
this paper, we will focus on the ... Show more content on Helpwriting.net ...
They are set to facilitate the preparation of high quality accounts in the United State so as to meet
the user needs and to enhance the growth in accounting methodologies. Additionally, they are set to
make it easy for entities to refer to the already set standards in preparation of their financial
reporting. As such and considering their benefits to the economy, because they create uniformity in
the financial reporting, they facilitate the transfer of labor across the regions in the United States.
Besides, by making the presentation of the statements easier and understandable, the users of
financial statements are able to make their rational investments and analytical decisions regarding
the companies issuing the report. And more importantly, by enhancing understandability,
comparability, relevance and reliability in the preparation of financial statements, potential investors
are able to assess companies' financial position for their rational economic decisions.
Role of ethics in financial reporting Ethics in financial reporting is all about maintaining the
truthfulness and fairness of the financial position of the entity in the financial statement and in
conformity with the laid down accounting standards. Since they present all data relating to the
historical, current and

The International Financial Reporting Standards
The International Financial Reporting Standards, or IFRS, are a set of standards designed to keep
accounts comparable internationally. They are increasingly important as we move towards a global
economy and with the increasing number of international companies. The United States, however,
typically uses a different set of accounting standards. These are called the Generally Accepted
Accounting Principles, or GAAP. The SEC has displayed interest in switching to the international
standards recently, however. "In November 2008, the SEC proposed a road map that, if several
milestones are achieved, could lead to a mandated use of IFRS for domestic listed companies in
2014. These actions of the SEC highlight the dedication of the U.S. to ... Show more content on
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The GAAP, while predominantly only used within the United States, is a very solid and well–written
set of standards in itself. While conformity to the IFRS seems inevitable for the United States,
support for GAAP remains strong in both companies and government entities. The US Securities
and Exchange Commission (SEC) released a 127 page report detailing reasons the United States
should opt not to adopt the IFRS in favor of GAAP. Furthermore. "Studies comparing quality of IAS
and U.S. GAAP using data from firms that traded in Germany's New Market, such as Leuz (2003)
and Bartov, Goldberg and Kim (2005), find no significant differences between the two sets of
standards, suggesting that IAS and U.S. GAAP appear to be of similar quality when applied in
German capital market." (Joos, p.21) Despite the strength of the GAAP and the familiarity that
United States companies have with the standards, it is generally accepted that the international
standards will be more beneficial in the increasingly global marketplace. United States conformity
to the IFRS has been met with delays and obstacles in recent years, however. As of present day the
SEC has not announced an official date for a complete switch from GAAP to IFRS. Road maps for
the conversion by the SEC in 2008 estimated completion dates in the

Us Accounting Standards vs. International Accounting...
United States Accounting Standards vs International Accounting Standards
June 21, 2009
Introduction
This research project will inform the reader of the difference between the United States accounting
standards and International accounting standards. The United States uses the Financial Accounting
Standards Board (FASB) to issue financial reporting procedures. The International Financial
Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB).
There are proposals for the United States to adopt the International standards. Financial reporting
procedures are debated about the United States using the Generally Accepted Accounting
Procedures (GAAP) or following the global procedures. This ... Show more content on
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David Bogoslaw (2008) talks about the convergence in further detail, "The uproar over fair value
accounting practices, which some critics have blamed for the depths of the global financial crisis,
threatens to sink a long–sought move by countries around the world toward a single set of
international financial reporting standards (IFRS). The U.S. Financial Accounting Standards Board
(FASB) has been working with London's International Accounting Standards Board (IASB) since
2002 toward what accounting professionals call convergence. The Securities & Exchange
Commission (SEC) is expected to announce its road map for conversion sometime this month,
which will probably include early adoption in 2010 for about 110 of the largest U.S. companies with
business operations throughout the world. The key difference between U.S. Generally Accepted
Accounting Principles (GAAP) and IFRS is that U.S. standards are based on explicit rules while the
international standards' reliance on principles gives companies more room to use their judgment in
deciding how to recognize revenue and other key metrics. Adoption of IFRS would also probably
trigger a big tax hike for U.S. companies, which would no longer be able to use the last–in–first–out
[LIFO] inventory accounting method, which doesn't exist under the international standards. The
LIFO method assumes that goods purchased most recently are sold first and that the

Accounting Reporting Criteria (Gm and Toyota) Essay examples
Accounting Reporting Criteria (GM and Toyota)
Team B Megan Wooliver
September 7, 2010
Accounting Reporting Criteria In order to keep up with the times most organizations of today are
finding themselves consistently coming up with different ways to keep accounting information
personal as well as accurate. Providing good accounting information not only leads to better
decisions but also increase in profit. Even two different organizations that provide a similar product
or service have completely different ways of reporting their accounting information. Throughout this
essay, Team B will compare and contrast many issues involved in the reporting process of two
different organizations that both provide a similar product, the ... Show more content on
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This act requires all officers to review accounting documents before they have been submitted and
sign off on them, make sure that all off balance sheets are reported, disclose to the public all
material changes that have taken place within the company over a given year, and lays down
penalties for those who do not follow these requirements. The Public Company Accounting
Oversight Board monitors businesses to make sure they comply with the act. GM, although it has
failed to comply with regulations and has filed for bankruptcy in 2009, is on track to fulfill these
standards in 2010.
International Accounting Standards
Toyota a foreign company based in Japan follows the reporting standards of the IASB or the
International Accounting Standards Board. The IASB is an independent board that develops
standards using due process. This process consists of six different stages, which have been taken
directly from the IASB web site and are located below... 1. "Setting the agenda 2. Planning the
project 3. Developing and publishing the discussion paper 4. Developing and publishing the
exposure draft 5. Developing and publishing the standard 6. After the standard is issued" (IASB
2009 pg 2)
After such standards are set, the IASB also works with other boards in order to make sure that all the
standards have been met and are being practiced effectively.
Acts and Regulations
In the United States, the Sarbanes–Oxley Act was passed to provide

Where Does the Us Stand on the Adoption of Ifrs?
Report: Where does the US stand on the adoption of IFRS? – 2012
Abstract
The globalization of markets over the past 50 years has led to the demand for increasingly
comparable financial statements across countries. In response to this demand, the International
Accounting Standards Board (IASB) was formed with the purpose of developing a set of high
quality global accounting standards. Although a majority of developed markets have adopted the
international standards, the United States has not. One reason for the delay in adoption is that many
of the standards are very similar. However, there are also several key differences between the two.
Presently, the United States Financial Accounting Standards Board (FASB) and the IASB have ...
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Nonetheless, in 2009, the IASB made it possible for its smaller private business constituents to
present their financial statements using less rigorous standards compared to public companies
(Samuel E. Johnson, 2011). This is largely based on the premises that smaller companies and their
external users do not need the all–embracing disclosures in the financial statements.
Most private business owners have unlimited access to the day to day operation records of their
companies. Additionally, it has been found that private companies have a costly yoke. They have to
comply with US GAAP which is a pointless waste of resources (AuditWatch, 2010). While small
business owners in the US are not able to use relaxed accounting standards as of yet, however, they
may in the near future enjoy the same privileges as their "international" counterparts. In late 2011,
the FASB commenced a project to examine whether there are any grounds to exempt non–public
companies from providing disclosures pertaining to fair–value disclosures (Fair Value Project,
2011). Although it may seem like another dead–end with regard to the Little–GAAP vs. Big–GAAP
issue, but it is a step in the right direction by the FASB to end this classic debate.
After their agreement in Norwalk, the two boards have met numerous times to reach convergence.
Up to this point, both boards have been only somewhat successful and many milestones

Materiality And Its Impact On The Field Of Auditing
Introduction With respect to the field of auditing, materiality is a critically important concept
addressing the significance of discrepancies, amounts, and transactions. Specific materiality
guidelines are required in accounting practices to avoid judgmental (legal) decisions. Materiality is
applied for most, if not all, economic decisions, and the topic of materiality is not a new issue.
Disclosures in re financial statements have been emphasized by courts in the United Kingdom since
the 1800 's, whereas materiality initially rose to importance in the United States following 1933 's
Security act. The significance of the materiality concept and its implications are pertinent to
business decisions, as well as for analysis and preparation ... Show more content on Helpwriting.net
...
Definition of Materiality The materiality concept has been addressed by The International
Accounting Standards Committee (IASC), as well as by accounting bodies in the United States such
as the American Institute of Certified Public Accountants (AICPA), the Securities and Exchange
Commission (SEC), the Financial Accounting Standard Board (FASB), and the General Accounting
Office (GAO). Materiality was defined by FASB Concepts Statement No. 2, Qualitative
Characteristics of Accounting Information (Para. 132, 1980) as follows: "The magnitude of an
omission or mis–statement of accounting information that, in the light of surrounding circumstances,
makes it probable that the judgment of a reasonable person relying on the information would have
been changed or influenced by the omission or mis–statement"(Juma 'h, 2009).
Classification of materiality What a company releases or discloses on the 'face ' of its financial
statements is a decision involving limitations as to the amount or extent of information to be
disclosed; this also applies for notes. In the first place, a comprehensive inclusion of all economic
events affecting a particular business would result in an enormous glut of unnecessary material that
is likely to present a false impression of the company to the stakeholders reading the financial
statements. Simultaneously, however, the professional accountant is aware that choice of the

Disadvantages Of Accounting Convergence Essay
Accounting Convergence: Advantages and Disadvantages
Winston Churchill once said that "there is nothing wrong with change, if it is in the right direction"
(Thinkexist.com) . Today, the accounting profession and standards in the United States is facing one
of the biggest changes it has seen in a long time: the convergence of its Generally Accepted
Accounting Principles (GAAP) to the International Financial Reporting Standards (IFRS). Is this a
step in the right direction for the United States? The debate is still alive, although the change is
happening now. In this paper I will explain the convergence and then describe some of the
advantages and disadvantages to this change. Convergence is a term that means "the coming
together or ... Show more content on Helpwriting.net ...
GAAP has been around for many more years than IFRS has. Is this an advantage or disadvantage for
a move towards IFRS? Some people would argue that it is a disadvantage because the U.S. GAAP
covers almost all possible accounting issues and has also shown sustainability through its years in
practice. On the other side, the advantage to having a newer set of standards is that they will not be
as cluttered as the U.S. GAAP. But doesn't the word "convergence" mean to eliminate the
differences between the two standards? So we would be blending the best of both sets of standards
and both of these arguments would be illogical, right? That brings us to another debate about the
convergence with IFRS. If the business world would flow better with one set of accounting
standards, why are we trying to blend the two accounting standards instead of just adopting IFRS? If
over 100 countries and counting have switched to IFRS, why can't the U.S. do the same so that one
set of standards will really be attained? According to Intermediate Accounting, some of the
standards between U.S. GAAP and IFRS that differ and are long–term projects for convergence are
issues such as revenue recognition, the conceptual framework, and research and development costs
(18). All of these issues are currently being worked on between the International Accounting
Standards Board (IASB) and the Financial Accounting Standards Board (FASB). An advantage to
the conceptual frameworks for both U.S.

The Collapse Of Enron Corporation
The purpose of this article is analyze the downfall of the Enron Corporation and how the collapse of
Enron Corporation consequence affected the United states financial market. Enron Corporation was
the seventh largest company in the United States, and had the biggest audit failure. In this Research
paper, it describes the reason of Enron Corporation collapse, including details of the internal/
external management, accounting fraud, and conflict of interest. Enron is the largest bankruptcy in
America history!
The Collapse of Enron Corporation and how the three major violations under the Generally
Accepted Accounting Principles (GAAP) introduce the fall of the Enron Corporation due to the off–
balance sheet arrangements, the role of mark to market and lastly, the manipulation of derivatives.
When the United States Congress passed the Foreign Corrupt Practices Act (FCPA) on 1977, to not
just prevent but to motorize financial irregularities in the market, and many violations in the
accounting system. Enron was the most famous Corporation in American history to collapse. A
major corporation created by acquisition and merge with two natural gas companies. The first
violation under the Generally Accepted Accounting Principles (GAAP) was the creation of the off–
balance sheet method. The off balance–sheet method served as a purpose in Enron's accounting
scandal. The purpose of the scandal was to maximize financial flexibility, minimizing the cost of
borrowing from creditors,

International Financial Reporting Standards And The United...
First, this paper will explore the differences and similarities between the financial statements that are
required by the International Financial Reporting Standards (IFRS) and the United States Generally
Accepted Accounting Principles (U.S. GAAP). Secondly, it will provide the needed information to
transition the financial statements of Amazon.com Incorporated to the IFRS from its current
reporting standards as outlined by the U.S. GAAP. Thirdly, it will provide an in depth analysis of the
changes that will be made to the financial statements. Finally, it will outline the visual differences
between the U.S. GAAP and the IFRS balance sheet financial statement.
To understand the intricacies of transitioning to IFRS from the U.S. GAAP one must understand
what both are. The U.S. GAAP is derived from a combination of standards and principles that are
the preferred practices established in the U.S. The main governing bodies of the U.S. GAAP are the
Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC)
. These two governing bodies work to ensure the standards of the U.S. GAAP are both relevant and
faithfully represented (Wahlen, J. M., Jones, J. P., & Pagach, D. P. 2013). The IFRS on the other
hand is beginning to gain traction as more and more countries adopt this practice. The IFRS has two
main sources of its standards and principles which are the International Accounting Standards Board
(IASB) and the International Accounting

Accounting Standards And Its Effect On Us Countries...
This paper follows the previous papers showing that there are needs for harmonization across the
globe in order for accounting standards to not be affected in a negative way. The best way to make
this happen is by adopting the same set of standards across the globe and stick by them. This paper
will show how the adoption of these standards will benefit countries globally by using the United
States alone as an example. As a matter of fact, the effects on U.S. reporting practices are likely to
be limited. Nonetheless, there could be a significant impact accounting reporting processes and
systems. Therefore our focus will be on the costs to implement the solution. The major out–of–
pocket costs will probably occur during the transition phase, ... Show more content on
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Additionally, companies will need to train their employees in the preparation of the change as well
as familiarize outside stakeholders like analysts and investors with the IAS. This could include, but
is not limited to hiring outside consultants because of the lack of in–house knowledge and
familiarity with the IAS, organizing conference calls for investors, preparing public statements
explaining differences in accounting policies, and redesigning their financial publications such as
annual and quarterly reports Choi & Meek, 2011). Also, the IAS can affect a country's government–
regulated industries such as utilities, telecommunications, and financial institutions that deliver
financial statements to their regulators. For example, in the U.S. capital requirements for financial
institutions are many times determined on the basis of U.S. Generally Accepted Accounting
Principles (GAAP) financial statements (Doupnik & Perera, 2012). Although the impact of IAS
adoption on the magnitude of reported earnings of U.S. firms is unclear, studies from other settings
suggest that earnings instability could rise, in particular if the switch to an IAS were to accelerate
the use of market–to–market

International Accounting Standards And Public Companies
'There has been a worldwide demand from regulators, investors, businesses, and auditing firms for a
single set of high–quality, globally–accepted accounting standards. The American Institute of CPA's
(AICPA) believes U.S. adoption of a single set of high–quality, globally accepted accounting
standards will benefit U.S. financial markets and public companies by enabling preparation of
transparent and comparable financial reports throughout the world" (aicpa.org). HISTORY The
original international accounting standards were developed in 1966. This was also around the time
that the International study group was proposed. In 1967 this group published papers and
information that helped to eventually create some accounting standards. In ... Show more content on
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All of the other countries, Argentina, Australia, Brazil, Canada, China, European Union, France,
Germany, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, turkey, and United
Kingdom use have been required to use IFRS or standards that may differ from IFRA to a degree.
REFERENCE CHART FOR IAS/IFRS # Description IAS / IFRS 1 Presentation of Financial
Statements & Disclosure of Accounting Policies IAS 1 2 Valuation of Inventories IAS 2 3 Statement
of Cash Flows IAS 7 4 Net Profit or Loss for the period, Prior Period Items and Changes in
Accounting Policies IAS 8 5 Contingencies and Events Occurring after the Balance Sheet Date IAS
10 6 Construction Contracts IAS 11 7 Accounting for Taxes on Income. IAS 12 8 Property, Plant
and Equipment IAS 16 9 Leases IAS 17 10 Revenue Recognition IAS 18 11 Employee Benefits IAS
19 12 Accounting for Government Grants and Disclosure IAS 20 13 The Effects of Changes in
Foreign Exchange Rates IAS 21 14 Borrowing Costs IAS 23 15 Related Party Disclosures IAS 24
16 Accounting and Reporting by Retirement Benefit Plans IAS 26 17 Consolidated and Separate
Financial Statements IAS 27 18 Accounting for Investments in Associates in Consolidated Financial
Statements IAS 28 19 Financial Reporting in Hyperinflationary Economies IAS 29 20 Financial

Accounting Standards Boards Paper 4
Accounting Standards Boards Paper
University of Phoenix
ACC 541–Accounting theory and Research
Professor: Cecil B. Lucy
Lien Bach
October 26, 2010
Introduction
Accounting was created thousand years ago. Many companies use accounting system to record,
maintain and report, and analyze business financial transactions. Because managers and investors
make their business decisions based on Financial Statement, information obtained from Financial
Statement must be concise and reliable. Budgets and performance reports provide decision support,
planning and control business operations; therefore, Financial Statements must be accurately to
represent a true and fair view of companies. To evaluate results of information from Financial ...
According to Geoffrey Whittington (2008), the standard setters could not achieve a solution to the
inflation accounting problem that users and preparers of accounts could be accepted. Whittington
also argued that the frameworks of both the IASB and the FASB gave emphasis to the usefulness of
decisions to investors when the focus was on general financial reports (Whittington, 2008). A recent
report shows that the International Financial Reporting Standards (IFRS) has called to replace the
Generally Accepted Accounting Principles (GAAP) in the United States by 2014. This change will
have a big impact on the United States public companies through the way they represent financial
reports (Hail, Leuz, & Wysocki, 2009). The controversy between the United States GAAP and the
IFRS are the fair value and the market value (Hail, Leuz, & Wysocki, 2009). If things persist, the
Securities and Exchange Commission (SEC) and the FASB may come against the IASB. The SEC
stated briefly that there are to be improvements about how the IASB be funded and governed. The
board was also criticized for being inadequate. Dr. Yvonne Hinson stated that the two boards had a
meeting in 2002 and came to an agreement known as the "Norwalk Agreement" that was also called
a memorandum of understanding. The memorandum stated that the IASB and the FASB would work
toward a common goal (Hinson, 2009). Through a convergence, the United States could adopt the
IFRS; however, arguments pro and con this

Ifrs And International Accounting Standards Board
In mainly everything, sports, class rooms, or work places you have a set of rules to go by. In the
accounting world, you must also follow a set of rules and standards. The Generally Accepted
Accounting Principles (GAAP) or the International Financial Reporting Standards (IFRS). Most
countries around the world use IFRS while the United States uses GAAP. International Financial
Reporting Standards and Generally Accepted Accounting Principles do things differently. Each
country's government sets which principles the accountants will use. There are also organizations
that have been formed to help with all the confusion between countries. The organizations are called
Financial Accounting Standards Board (FASB) and International Accounting Standards Board
(IASB). FASB is the organization that has been designed by the US government to establish GAAP
in the United States. IASB is the international organization developing and promoting accounting
standards to be used throughout the world. GAAP and IFRS are both accounting principles but also
have different regulations. The main difference is historical values for assets and liabilities and
current or market values. GAAP looks at the historical value while IFRS looks at current or market
values. US accountants are conservative and always look at the historical value. Accountants using
IFRS would look at the value of the land or house if it increased, even if it is not sold, while GAAP
would not look at the increasing value until it

The Accounting Policies Of The United States
2. Significant Accounting Policies
A) Basis of accounting
Both the U.S. GAAP and IFRS both have similar requirements when it comes to the basis of
accounting. This means that they both place a heavy emphasis on fair values, essentially implying
that Chris does not need to address the basis of his company's policies. In addition, both standards
require companies to inform the public regarding any uncertainties in the accounting records.
However, Chris was already given sufficient information for the conversion in the Basis of
Accounting section, as the accounting policies were applied by each consolidated company
consistently to all relevant periods. Therefore, Chris is able to transition the company's basis of
accounting with no other ... Show more content on Helpwriting.net ...
Other than bank overdrafts, however; Chris should have enough information to convert cash and
cash equivalents to IFRS.
C) Accounts Receivable and Other Receivables
Chris' first objective in analyzing his firm's receivables is to understand how they are recorded. The
International Standards require receivables to be measured at fair value with an amortization cost.
However, Chris was not given this information in his financial records. Still, what he was given is
that Ruckman analyzes accounts receivable based on transaction history and creditworthiness of the
customer, suggesting that the firm's receivables are done per case, and thus cannot be lumped
together. With that, Chris can move forward knowing that accounts receivable are in accordance
with IFRS.
D) Inventories
Inventory is known as the single most important item on a balance sheet. Every business contains
inventory, and Ruckman, Inc. is no exception. With the concept of inventory come the different
types of cost methods, including: last in first out (LIFO), first in first out (FIFO), and the weighted
average cost. With such an important item, it is understandable that both standards allow and
prohibit different types of costing methods due to certain reasons. The major difference between the
two is the allowance of the LIFO method, which is only allowed by GAAP. This method allows
companies to highlight

Regulation Standardising Accounting Practice
University of Wollongong Research Online Faculty of Business – Accounting & Finance Working
Papers Faculty of Business 2006 Regulation: Standardising Accounting Practice M. Gaffikin
University of Wollongong, gaffikin@uow.edu.au Publication Details This working paper was
originally published as Gaffikin, M, Regulation: Standardising Accounting Practice, Accounting &
Finance Working Paper 06/22, School of Accounting & Finance, University of Wollongong, 2006.
Research Online is the open access institutional repository for the University of Wollongong. For
further information contact the UOW Library: research–pubs@uow.edu.au 06/22 University of
Wollongong School of Accounting & Finance Regulation: Standardising Accounting Practice ...
Thus, it was seen as necessary to maintain the integrity of the profession of accounting as the
capacity to effectively self regulate was viewed as one of the hallmarks of a profession. The
accounting profession, therefore, remained very private enterprise in keeping with the ideology of
capitalism. But, the state did intervene in creating the SEC as one of its functions was the oversight
of the published accounting information of publicly listed corporations. However, after much debate
between the SEC and the profession it was decide that the SEC would leave the profession to
develop principles of accounting practice which would eventually become generally acceptable as a
standard of professional performance. As indicated in the previous chapter, there have been varying
interpretations placed on the reason for the state's intervention in creating the SEC and why the SEC
delegated its accounting responsibility to the profession. Taken together, both the creation of the
SEC and the profession's serious attempts at effective self–regulation would tend to suggest that
they were necessary to preserve capitalism from the public disenchantment that marked the great
depression. These developments in the 1930s greatly affected processes of accounting regulation in
the United States. Questions surrounding the issues involved continued for many

Globalization : A Clear Image Of Globalization
Globalization has truly affected each society on the planet since we have moved far from individuals
and organizations staying inside of their own border into an international business sector. Our
economies are interrelated with each other and even companies who fundamentally market in one
territory are not totally autonomous. This implies the materials that a company utilizes as a part of
their businesses can be produced and dispatched from another country. This shows a clear image of
globalization in real life. The way we consider globalization is commonly in the economic sense as
previously described, however, it likewise portrays the phenomenon of one population expanding
into another and after that merging them into current culture. ... Show more content on
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Eastern Asian societies have a tendency to have solid uncertainty avoidance since they have a
tendency to incline toward unequivocal rules and planned activities, however, in the United States,
one must risk everything in order to have what others do not have. Masculinity vs Femininity: The
basic issue tended to by this element is the system in which a general public allocate social roles to
the genders. A sample of a masculine society would be that of the United States, where
characteristics, for example, wealth, competitiveness, ambition and assertiveness are pursued.
While, Japan has a more feminine value dimension, due to the fact that the general population of
that culture have a tendency to pursue quality of life and relationships. Large vs Small Power
Distance: The principal issue tended to by this element is the means by which a general public
handles inequalities among individuals when they happen. A case for a country that has large power
distance is India, where even in the country 's long history, individuals abide to a rank system they
were naturally introduced to and had no real way to move out of. The United States is set to be the
best example of a country with small power distance, where

The Convergence Of Gaap And Ifrs
"A review of information about the convergence of GAAP and IFRS" Revenue recognition is one of
the major areas that a convergence of Generally Accepted Accounting Principles (GAAP) and
International Financial Reporting Standards (IFRS) unleashes its fiery wrath on US domestic and
global businesses. GAAP are the accounting principles that United States domestic companies
currently use. GAAP was made and is regulated by the Federal Accounting Standards Board, known
as FASB, established in 1973. This is a discussion of GAAP and IFRS, and how GAAP regulations
for revenue recognition compare to the principals of revenue recognition established by IFRS
standard IAS 18. IFRS was established by the International Accounting Standards Board (IASB) to
develop quality and transparent global accounting standards. The United States began working with
the IASB and has been on course to update GAAP to recognize the same accounting principles and
standards as IFRS since 2002, after signing the "Norwalk Agreement." The merger was originally
scheduled for commencement in 2009 but was postponed a couple of times, and it is now set to take
effect December fifteenth of next year for US public businesses. Revenue recognition is an
accounting principal that determines when income from selling goods, rendering of services,
contracts resulting in interest, dividends or royalties can be measurable and will be recorded as
revenue. Revenue is the amount of money a business brings in during its

Implementing International Financial Reporting Standards
IMPLEMENTATION OF IFRS IN U.S.
By Sanam Maknojia
INTRODUCTION
The objective of this paper is to deliberate the concerns regarding implementing International
Financial Reporting Standards in United States. There is no scope that IFRS standards would be
fully implemented in the United States. The main reasons are two regulatory bodies Financial
Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) are
unable to integrate on the concept of convergence. Due to current economic conditions, FASB and
IASB came together to reduce the differences between U.S. GAAP (Generally Accepted Accounting
Principles) and IFRS (International Financial Reporting Standards). Furthermore, Security and
Exchange Commission has ... Show more content on Helpwriting.net ...
Many companies opt to adopt the IFRS standards, at present more than 120 countries either agreed
or required to implement IFRS standards. The acceptance of IFRS in Europe made many countries
to adopt IFRS standards. European countries adopted IFRS in 2005, the general response was
positive. The major benefit companies have received since after adopting IFRS was the
establishment of a common European market, (Hibbard, 2012).
IFRS IN UNITED STATES
United States supports IFRS standards, but does not emphasize on its full enforcement. This issue
has been in debate for years. SEC has shown its immense support to meet the growing challenges of
IFRS acceptance in the United States. SEC has allowed many foreign firms to form their financial
statements pertaining to IFRS. Few companies have attempted towards the use of IFRS standards.
SEC plays a vital role in the International Organization of Securities Commission, where companies
that are operating in foreign market were recommended to implement "Thirty core" standards
formed by an international accounting standard committee. In addition, SEC also supports the
Norwalk agreement where both FASB and IASB commit to form a "harmonized" global standards
and willingness to establish a plan to align important U.S GAAP and IFRS standards for financial
reporting. (FASB website)
The process to implement IFRS is not that easy,

Certified Public Accountants ( Cpa ) All Over The World...
Certified Public Accountants (CPA) all over the world follow company policies and regulations. The
Generally Accepted Accounting Principles (GAAP) is a standard accounting system used by
accounts in the United States of America. CPAs who work for international companies use the
International Financial Reporting Standards (IFRS). "The accounting standards developed,
established by the Financial Accounting Foundation's (FAF) standard–setting Boards–the Financial
Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB)–
determine how those financial statements are prepared FAF ("The Importance")
The governed body of GAAP is Governmental Accounting Standards Board (GASB) and Financial
Accounting Standards Board ... Show more content on Helpwriting.net ...
The GAAP uses a lot of accounting records and paperwork to make a final report for the company to
review and company investors.
United States of America CPAs use GAAP for applying the guidelines and understanding the
language of accounting communication. Accountants have an important role when it comes to
informing and checking the financial status of the company they are working for. Accountants have
to work with different types of accounts and accountants. When other accountants look over another
account's record or when accountants work together the GAAP is the common language that is being
understood, and work can be accomplished faster and easier between accounting.
The GAAP is not only used by accounts, but it helps investors and Company Executive Officers
(CEOs) to review how the company is currently doing. The use of the GAAP is for the benefit of all
who are working and investing in the particular company. "Although it is not written in law, the U.S.
Securities and Exchange Commission (SEC) requires publicly traded companies and other regulated
companies to follow

Ifrs Synthesis Essay
For nearly half a century, a movement has been underway to establish a high–quality,
comprehensive set of international accounting standards, with the goal of facilitating international
trade and investment. In the global capital market, differences in the rules of accounting for the
purposes of recognition, measurement, and reporting of financial results have impaired the smooth
transfer of information across borders. Given that it accounts for nearly a third of the global market,
there is considerable pressure for the United States to conform to the International Financial
Reporting Standards (IFRS), as promulgated by the International Accounting Standards Board
(IASB). While moving to a single set of accounting standards could create ... Show more content on
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Standardized reporting across firms from different countries would facilitate cross–border
investment and the integration of capital markets (Hail, Luzi, et al). According to Beke (2011),
Standardization implies the "elimination of alternatives in accounting for representing economic
transactions and other events" (Angeloni). In essence, similar events and transactions would be
reported in a similar manner, and vice versa. Having more comparable reports allows firms to make
better–informed investment choices due to a better understanding of competing firms, which can
lead to cost savings. Moreover, firms that have more comparable reports can better contract with
suppliers and firms in other countries, and these contracts are more likely to be fully specified and
enforceable. Studies also show that the adoption of IFRS reporting should be associated with an
increase in market liquidity, as well as a decline in firms' cost of capital (Hail, Luzi, et al.).
Before delving into the arguments against IFRS adoption, it is important to note that the U.S.
economy and institutional framework have many idiosyncrasies. Hence, even if switching to IFRS
proved beneficial for some countries, it would not necessarily be the same for the United States. To
start, the United States possesses the largest economy in the world, and its public equity market
accounts for a third of global market

International Accounting Standards Board And Financial...
It all began on October 2002 where the International Accounting Standards Board and Financial
Accounting Board signed a memorandum of understanding that has come to be known as the
"Norwalk Agreement". Here the two boards met and decided to make their standards fully
compatible and put it into practice and once they conquer their goal, they have to make sure it is
maintained. But before I divulge into details regarding the future and presently achieved goals of the
convergence, I would like to throw some light on the history and background of the two boards
involved. International Accounting Standards were formed between 1973 and 2001 by the board of
the International Accounting Standards Committee (IASC). On 1 April 2001, the new ... Show more
content on Helpwriting.net ...
After the year 2001 almost 120 countries have adopted the use of IFRS. On the other hand The
United States Generally Accepted Accounting Principles have been set by the American Institute of
Certified Public Accountants (AICPA) which is subject to Securities and Exchange Commission
regulations. The AICPA first created the Committee on Accounting Procedure in 1939, and replaced
that with the Accounting Principles Board in 1959. In 1973, the Accounting Principles Board was
replaced by the Financial Accounting Standards Board (FASB) under the supervision of the
Financial Accounting Foundation with the Financial Accounting Standards advisory council serving
to advise and provide input on the accounting standards. Organizations such as United States
Security and Exchange Commission, Financial Accounting Standard Board, and Governmental
Accounting Standards Board influence the GAAP in the United States.
Coming back to convergence, for the past several years the IASB and IASC before 2001, have been
working to develop high quality, easy to understand, and practicable International Financial
Reporting Standards to serve investors & creditors, around the world in globalized capital markets
to make investment decisions. When IASB took over from the IASC in 2001, few countries back
then had accepted and practiced International Accounting Standards. Everything changed with the

The Pros And Cons Of International Financial Reporting...
International Financial Reporting Standards (IFRS), represent the norms that were introduced by
IASB. Being an independent organization that was not operational to earn profits, IASB, also known
as, International Accounting Standards Board, incepted IFRS to facilitate public companies around
the globe. IFRS presented a framework that served as a guide for these corporations directing them
on preparation and disclosure of the financial statements. The International Financial Reporting
Standards offered general guidance to the seekers concerning the financial statements. The standards
never strived to set industry specific reporting principles or regulations.
The U.S. GAAP represents the set of accounting principles that strictly abide by the laws and
regulations. The U.S. GAAP, also known as, Generally Accepted Accounting Principles, encompass
the legal norms, complex mechanisms and through details for corporate accounting. The U.S. GAAP
standards are often perceived as building blocks for the decisions taken by FASB, also known as,
Financial Accounting Standards Board. GAAP served as a legal and regulatory standard for the
companies operational and listed on the stock exchanges in the United States.
In comparison with IFRS, the accounting standards proposed by the U.S. GAAP are a bit inflexible.
My agenda is to find out the difference and the positive, negative effect as professional in
international market. (Figure 1.1)
The current data indicate there are 195 free

Financial Accounting Standards
FASB & IFRS
Financial Accounting Standards
The Financial Accounting Standards Board (FASB) has been around since 1973 and their
organization's duty and task is to set and provide effective and reliable financial accounting
standards in the United States. The Financial Accounting Standards Board is also a private sector
and is a not for profit organization, also recognized as U.S. Generally Accepted Accounting
Principles (GAAP). The Securities and Exchange Commission (SEC) and The American Institute of
Certified Public Accountants (AICPA) recognize their standards and consider them to have authority
and to be dependable. (Facts About Fasb). The Financial Accounting Standards Board's information
is heavily used by different people such as investors, lenders, auditors and many more to influence
their choices about how they designate their capital. (What We Do: Fasb) It also helps the different
financial markets run smoothly.
International Financial Reporting Standards The International Financial Reporting Standards "are a
set of accounting standards developed by the IASB that is becoming the global standard for the
preparation of public company financial statements." (AICPA). IASB started operating in 2001 and
is established as an independent organization that also sets accounting standards. According to the
American Institute of Certified Public Accountants, IFRS is used by roughly 120 nations all over.
Main Difference between GAAP and IFRS
According to Pologeorgis

Difference Between The Convergence Of Gaap With IFRS

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