Accounting Standards Boards Leslie Brian ACC/541 November 14, 2011 Delphine Agnor Wolsker Accounting Standards Boards The field of accounting is constantly evolving. This is true not only for the theory of accounting itself but also the entities that govern its theory and practice. Presently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are faced with some of the biggest challenges to date. To understand the significance of these two boards, it is necessary to understand their histories, relations between the boards, and the standards that they set. Also how the knowledge of these boards and the field they lead, gained through the masters of science in accountancy
Despite those enormous advantages, it has been argued that IFRSS adoption lead to significant costs. The main argument is that IFRSs do not consider local needs and priorities as every country has their own ‘business environment, legal systems, cultures, language and political environment’ (Henderson and Peirson, 2000 cited from Malthus, S., 2004). However, to overcome this problem, IASB can accommodate flexible reporting standards that enable companies to choose alternatives that are more suitable for their external condition. It is opinion of some opponents of IFRS adoption that IAS is ‘insufficiently detailed’ (Uddin,M.S., 2005, p.4) that require accountants’ and auditor’ professional judgment. However, overly detail might be contra productive and not flexible in anticipating every changes and differences.
As the responsibilities of the global harmonization of accounting standards IFRS and GAAP transfer to IASB, FASB’s influence is waning. Advantages of the convergence include high quality financial reporting, which lowers cost of capital for investors and the cost of borrowing for companies. However, there are disadvantages to be noted, such as the costs of introducing IFRS to current and potential accountants and the risk of reducing the uniformity of financial reports due to the lax rulings of IFRS, which promotes earnings management amongst companies. Although arguments regarding the convergence remain prevalent, the completion of IFRS and GAAP is inevitable. Come year 2015, accountants, investors, and companies alike will discover whether or not the pros outweighed the cons; or vice versa.
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.
ACC30001 Accounting Theory Report From: Osama Aldrewesh To: The Chief Accountant of the Australian Securities and Investment Commission (ASIC) Report handed to ASIC: 26th September 2014 Executive Summary This report has been compiled for the Chief Accountant of the Australian Securities and Investment Commission (ASIC). Its aim is to provide an analysis of
Within the accounting profession, there have been challenges to develop a set of standards that are generally accepted and universally practiced. Thus far, the main debate in setting accounting standards is “Whose rules should we play by, and what should they be?” While the answer is unclear, users of financial statements and reporting must find methods that has an universal objective, that allows “Grapes for Grapes” comparisons that clearly, fairly, and completely prepares a company financial statements. For years GAAP has been the common set of standards and procedures for the U.S, the core for establishing a principle of reporting but now IFRS an international friendly financial reporting system has become popular for its use globally.
http://www.aro.kworld.kpmg.com/KPMGPrint/print.asp?vid=assursrc:all&NXTScript=n... 16/08/2010 KPMG Document Print Page 3 of 426 The information contained herein is for internal and external use. Content The purpose of this publication is to assist you in understanding the significant differences between International Financial Reporting Standards (IFRSs) and U.S. Generally Accepted Accounting Principles (U.S. GAAP). This publication does not discuss every possible difference; rather, it is a summary of those differences that we have encountered most frequently in practice, resulting from either a difference in emphasis or specific
INTRODUCTION INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS) In 2001, The International Accounting Standards Board (IASB) was established to develop the International Financial Reporting Standard (IFRS). ). The first IFRS was issued in 2003 and European Union (EU) members committed for requesting all listing company to apply the IFRS in their jurisdictions and will effective on year 2005 (Brussels, 2000).
The IFRS are superseding GAAP as the official reporting structure of many countries and as of July 2014, 283 have adopted the IASB’s new rule book (PricewaterhouseCoopers, 2014). The transition to IFRS has spawned a worldwide dialog of investors and analysts discussing the effects it will have on reporting and the implications this move carries into the future. This paper will review some financial reporting standards, the major distinctions between the U.S. GAAP and IFRS, and the competitive advantages and disadvantages of altering the U.S. reporting structure.
| | 2. What is IFRS? | International Financial Reporting Standards ("IFRS"), often known the original International Accounting Standards ("IAS"), are a set of accounting standards. They are issued by the International Accounting Standards Board ("IASB"), an independent, international organization supported by the professional accountancy bodies. The objective is to achieve uniformity and
Article: Does mandatory IFRS adoption improve information quality in low investor protection countries? Introduction The article is showing the relationship between IFRS adoption and the effect on the quality of the information in low investor protection countries. International Financial Reporting Standards (IFRS) is a set of accounting standards, developed and maintained by a not-for-profit organisation which is called International Accounting Standard Board (IASB) (http://www.ifrs.org/About-us/Pages/What-are-IFRS.aspx). The purpose of IFRS is to provide a global framework and also a general guideline to all firms such as public companies, so that they can prepare and disclose their financial statement globally. It is interpreted as it can provide the investors and other users (internal and external users) with financial statement that has ability to be compared with other company either within countries or overseas (http://www.ifrs.org/About-us/Pages/What-are-IFRS.aspx // http://searchsecurity.techtarget.co.uk/definition/IFRS-International-Financial-Reporting-Standards). It also uniting the capital market under one common reporting language and this would lead to produce high quality financial reporting across the world (ball,2006). This article has included 3 countries which in the low investor protection countries such as France, Germany and Sweden, in order to examine the effect of IFRS adoption on information quality. Besides, the three countries have different
In addition, many studies confirm that investors’ trust in their company and decisions raise by following IFRS principles due to the transparency. In fact, Ball (2006) provides a paper which explains the direct and indirect IFRS’ advantages for the investors. He mentioned 5 direct advantages which the first one is that IFRS provides more accurate, timely and comprehensive data in the financial report and financial statement. The second advantage is that IFRS develop the quality of financial reporting which make small investors be able to deal with the financial statements and benefit from information in the statements since they are less likely to be able to deal with the financial statements, hence, risk is diminished by better understanding of the information in these statements. Thirdly, IFRS help to minimize the cost paid to the financial analysts to evaluate the financial statements’ information by the investors because the formats of reporting are standardized and they are easier to be compared internationally. Minimizing the cost of evaluating and operating the financial information maximizes the stock market efficiency which assists the investors to gain profits. Making the standards uniform helps to eliminate the barriers to the cross-border divestitures and acquisitions, therefore, it will present investors with growing takeover
In any case it is being realized that the adoption of the IFRS certainly creates a lot of advantages not presently realized in the use of the GAAP. These accounting standards are generally the rules and regulations that companies and organizations are expected to adhere to in the process of presenting their financial statements to the stakeholders(Williams, 2009). The change from the GAAP to the IFRS is certainly needed given that the financial environment has certainly grown more complex and intricate to the extent that such differences in the accounting standards can only create the frequent challenges realized in the transactions(Watts, 2003).
THE ACCOUNTING REVIEW Vol. 85, No. 1 2010 pp. 31–61 American Accounting Association DOI: 10.2308 / accr.2010.85.1.31 Market Reaction to the Adoption of IFRS in Europe Christopher S. Armstrong University of Pennsylvania Mary E. Barth Alan D. Jagolinzer Stanford University Edward J. Riedl Harvard University
The IASC Board approved the IASB (International Accounting Standards Board) Framework ( in April 1989) which was a successor of the IASC Board, and it accepted its Framework in April 2001 (Wells, 2011). International standards are developed by IASB which are named International Financial Reporting Standards (IFRS). Although IASB took the place of IASC with its accounting standards, its IAS (International Accounting Standards) was enforced by IASB and available into practice until now. The conceptual framework is helpful when it is used to develop the setting of International accounting standards. First of all, the definition of conceptual framework provided by Melville (2014, p. 17)[ Melville, A. (2014). International Financial Reporting.(4th ed.). Edinburgh Gate: