Iasb Conceptual Framework And The Relevence Of Prudence

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.

In May 2008, the AICPA’s Governing Council designated the International Accounting Standards Board (IASB) as the body authorized to establish international financial accounting and reporting principles under rule 202 and 203 of the AICPA Code of Professional Conduct. Below is an illustrative Independent Auditor’s Report on financial statements issued in conformity with IFRS.

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

It is an area where different accounting professional have their own views on the whole ideology of stewardship , there are arguments and disagreements put forward from various professional accounting boards and groups as well as standard setters on the drafts on conceptual framework in 2006. There are also other debates on the concepts of fair value accounting which talks about on what basis are the asset to be valued, and also the terms and conditions as to what can be categorized as a liability. It is not always right to presume that a single set of accounting standards would be the way to attain uniformity, just as we cannot expect everyone to pray to one god but we can expect everyone to pray to their respective god if we want harmony and peace. Hence there should be room for economists, accounting experts and others to practice healthy accounting in the way they are accustomed

In the IASB framework, prudence is defined in terms of a degree of caution. The need to be careful implies to allow a degree of caution and therefore to permit a degree of prudence, but prevent overuse of prudence. 'Any overuse of prudence results in a loss of transparency, which is why the ASB is right to be wary of it. When it is excessively or inconsistently applied, it can make obfuscation of results and trends possible' (Paterson,2002: 1). Trends in financial reporting act contrary

The International Accounting Standards Board and the IFRS were created in 2001, which replaced the International Accounting Standards Committee (IASC) (IFRS ,2016). The monitoring board was created in 2009 (IFRS ,2016). ISAB and IFRS work to bring transparency, accountability and efficicenny to financial markets around the world (IFRS , 2016). The accounting standards are set as requirements to be allowed by organizations when the financial statements are prepared (IFRS, 2016). Standards are set by the IASB are the IFRS Standards (IFRS, 2016).

IAASB is a team of the International Federation of Accountants. It was created to increase uniformity of auditing practices and related services throughout the world by creating standards on auditing and reporting practices. Their role is to develop standards of consistency in accounting quality. They do not override a member nation's auditing standards however; members in countries that have standards in place should try to remove variations by likening their standards to those of the IAASB.

In recent years there has been significant changes made in our understanding of the relationship between the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). At present both the IASB and FASB are working on a joint venture referred to as the convergence project in hopes of eliminating a variety of differences between International Financial Reporting Standards and U.S. GAAP. Another area covered in this paper besides a brief history of the relationship between the IASB and FASB will be how the MSA program will prepare students for the accounting profession. The intent of this paper will be to address both issues first; explaining my understanding of the

The ASAF is made up of representatives of both national and regional standard setters, and it serves as a check to the IASB to "ensure that a broad range of national and regional input on major technical issues... are discussed and considered." They also provide a background to "facilitate effective technical discussions on standard-setting issues" which may involve the IASB both directly and indirectly. The Financial Accounting Foundation (FAF), which parents FASB, helped carve a path for FASB to join the ASAF despite its refusal to adopt IFRS as its sole accounting standard, and they continue to use their influence to ensure that FASB keeps its presence. During the quarterly ASAF meetings, FASB keeps the other members updated on U.S. GAAP developments as well as IFRS usage in our country (through foreign private

IFRS is a set of accounting standards promulgated by the International Accounting Standards Board (IASB), an international standard-setting body based in London. It was designed as a common global language for business affairs so that company accounts are comparable and understandable across international boundaries (Ghosh, 2010). In June 2002, the European Union (EU) adopted an IAS Regulation requiring European companies listed in an EU/European Economic Area (EEA) securities market to prepare their consolidated financial statements in accordance with IFRS starting in 2005 (United Kingdom).

The International Accounting Standards Board (IASB) with the objective of developing globally accepted standards establishes the International Financial Reporting Standards (IFRS). On the other hand, the Financial Accounting Standards Board (FASB) establishes the General Accepted Accounting Principles (U.S. GAAP) with the mission to improve the standards. In 2015, Hoyle, Schaefer, and Doupnik concluded, there are three key differences between the two, including recognition differences, measurement differences, and presentation and disclosure differences. Whether or not to recognize an item, how an item is recognized, or when it is recognized are the main differences regarding the recognition differences. For instance, research and development

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

There have been proposals that have been working on with regard to the replacement of GAAP (Generally Accepted Accounting Principles) with IFRS (International Financial Reporting Standards) as used in the accounting and financial reporting aspects. Such convergence requires that the functions of the GAAP standards be added to the IFRS. The International Accounting Standards Board (IASB) developed the IFRS which is a less-detailed financial reporting system.

The IFRS were introduced in 2001 when the International Accounting Standards Board (IASB) took over from the old International Accounting Standards Committee (IASC). The move to these standards have been part of a movement for accounting which has seen a lot of countries change the way they go about their domestic accounting and instead use the international standards for more consistency across the globe (Brochet, Jagolinzer & Riedl, 2013).

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are working together to eliminate a variety of difference between the United States generally accepted accounting procedures (U.S. GAAP or GAAP) and International Financial Reporting Standards (IFRS). This convergence project grew out of an agreement reached by the two boards in 2002 (Deloitte, 2004).