Financial Accounting : International Financial Reporting Standards

1904 Words Apr 28th, 2015 8 Pages
MGT225 FINANCIAL ACCOUNTING ESSAY

1. Introduction
Before 2001, none of the major economies in the world requires the use of International Financial Reporting Standards (IFRS). However, since IFRS was adopted and required by the European Union (EU), IFRS is currently the most widely shared set of accounting standards with its application required or permitted by approximately 120 countries as indicated by the IFRS Resources (2015). IFRS, perceived as “a single set of high-quality, understandable and enforceable accounting standards” (IASB, 2007, p.4), shows its prevalence all around the world. Nevertheless, there are still some opponents against such harmonization. “The likelihood that any U.S. company will be forced to switch from using today’s version of U.S. Generally Accepted Accounting Principles (GAAP) to using today’s version of IFRS is absolutely zero”(2010), said the specialist in corporate financial reporting, Bruce Pounder, doubting the possibility of eliminating differences between IFRS and U.S. GAAP, not to mention sharing a single set of accounting standards in all countries.

“The differing viewpoints are often rooted in different perceptions about the role of accounting in the global economy”, explained by Michel Prada (2014). Based on different standpoints, users, providers and monitors of accounting information would face with tradeoffs between rationales of accepting a common set of accounting framework and the oppositions or obstacles occurred, In spite…
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