Should China Adopt International Accounting Standards?.

Fosbre, Anne, Ellen M. Kraft, and Paul B. Fosbre. "The Globalization of Accounting Standards: IFRS Versus US GAAP." Global Journal of Business Research. 3.1 (2009): 61-70. Web. 27 Mar. 2012.

The IOSCO plan does not cover accounting standards.(66) These standards are important for providing financial statements in a scheme that are prepared in the similar manner as those by issuers from other countries. The development of international accounting standards is the subject of a distinct project by IOSCO, and many accounting professionals who are concomitant with that undertaking are hopeful that a satisfactory solution is within reach.(67) Supposing, however, that an agreement is possible on a core set of financial standards and that they too are embraced by securities regulators as compulsory for foreign issuers, the road to commonality has at least two other impediments.

As stated earlier, the IASB arose from specific needs of the accounting industry and the public. As international trade has increased, the need for transnational accounting information has increased as well. This sparked the demand for development of international accounting standards to make financial data between countries more comparable. In 1973, the International Accounting Standards Committee (IASC) was formed to develop these international standards. The standards issued by the IASC, prior to 2001, were called International Accounting Standards (IASs). In 2001, the IASC made the International Accounting Standards Board (IASB) the official international standard-setting body. The standards issued by the IASB are called International Financial Reporting Standards (IFRSs) (Schroeder, Clark, & Cathey, 2011, p. 82-87).

Literature review. The economic integration and globalization processes increased the need for accounting standards to be more reliable (p21 McCarthy, M., & McCarthy, R. (2014).). The accurate determination of income and

As the complexity of our financial economy develops it is important that our accounting standards progress in accordance. Accounting is very important to the development of the global and local economies. Accounting is basically the gathering, summarizing and presenting of financial information of an entity to interested internal, external and possible investors. This information should be presented in a non-bias way so that other people are able understand.

Both approaches can be considered as a long-term performance, which is involved in Confucianism. The suggestion of full disclosure of Chinese and Japanese financial report seems to attribute to the concepts of honesty and truthfulness in the Confucianism. Unfortunately, honesty and truthfulness does not occur in either country. In fact, they do not really accept the economic substance in their accounting systems. They traditionally adhere to the pattern of legal form. In the accounting report, they usually ignore the valuations of fair market. Instead, they focus on the historical costs. However, substance over form is used when there is new accounting issued in China. Additionally there is a hierarchical order, which means that people must consider relations, such as family finances and business transactions exist in Chinese society (Tang, 2000). Confucianism ideals mean that there are no accounting principles and no governmental supervising, but it does not exist in those

increased international compatibility of accounting standards should occur, because they are developed in the context of a conceptual framework that is similar to the conceptual frameworks used by the International Accounting Standards Board (IASB) and major overseas national standard setters;

For decades, countries have designed their individual accounting standards principle-based, rules-based, tax-oriented, or business-oriented. Globalization has led to the greater needs with regards to harmonizing the standards (Kimmel, 2013). By late 1990’s the dominant standards were the IFRS (International Financial Reporting Standards) and U.S. GAAP (Generally Accepted Accounting Principles). Thus, both the standard setters namely; FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) launched a convergence project prior to the IFRS being essentially adopted by several countries. Measures are being taken to reduce likely impacts the frameworks would have on financial statement and reduction of last minute changes (Kimmel, 2013).

According to Lutz and Eberle (2008), a lot of countries prefer to have their own standards because culture plays a big role in developing and setting national accounting standards. Thus, compliance with international

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,

Finally, the Chinese emerging market implemented a series of auditing standards within a short period. The

The accounting system reform cannot be stopped until it is completely accepted by foreign companies, which has a long way to go. But only if China can do so, the global trading in China can get the most benefit and the investment.( Jiashe Ge. Facing the New Century-Focusing On the Trend of Chinese Accounting.1999)

Abstract—Accounting in shaped by economic and political forces. It follows that increased worldwide integration of both markets and politics (driven by reductions in communications and information processing costs) makes increased integration of financial reporting standards and practice almost inevitable. But most market and political forces will remain local for the foreseeable future, so it is unclear how much convergence in actual financial reporting practice will (or should) occur. Furthermore, there is little settled theory or evidence on which to

As of November 24, 2015 China’s reporting standards are created by the Accounting Regulatory Department, Ministry of Finance, People’s Republic of China. Its role is to be responsible for the setting of the accounting standards in China for business enterprises (IFRS, 2015). As IFRS is stretching worldwide, China has made a public commitment to support global accounting standards and move towards the IFRS as those standards. It is also important to note that the Chinese Accounting Standards for Business Enterprises (ASBEs) was recognized in a joint statement back in 2005. A memorandum was signed by a representative of China and a member of the IASB in 2005 supporting the view that the new accounting standards were convergent with IFRS. A revised and improved version will continue to be on the rise to meet IFRS standards in completing convergence. Very recently, an announcement was made that there are up and coming steps being taken for internationally-oriented Chinese companies with steps for an advance use of the IFRS standards in China. It states that it will also identify the vision of Chinese Accounting Standards becoming fully integrated with IFRS and is encouraging continued co-operation between IASB and Chinese stakeholders (IFRS, 2015).

The paper objectives is to determine the impact of differences between UK accounting standard and International accounting standards to the decisions of investors and make some recommendations, hoping to give investors a comprehensive view and a more accurate when they make investment decisions. The research only mentions differences affect to the investment decisions instead of go deep into analysis the entire differences between the two accounting standards. Nghiên cứu đưa ra