Accounting Standards And Its Effect On Us Countries Globally By Using The United States Alone As An Example

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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…
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
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