The Accounting Systems of the United States and France

The International Accounting Standards Board (IASB) was formed in an attempt to bring uniform accounting standards within international countries through its issuing of the International Financial Reporting Standards (IFRS). Today, over 100 countries including Canada, India, and Japan have adopted these standards for financial reporting. The growth of multinational companies such as Coca Cola and the increasing desire of cross-border investing have made it apparent that the U.S.accounting standards known as the Generally Accepted Accounting Principles (GAAP) issued by the Financial Accounting Standards Board (FASB) can no longer remain separate from IFRS. Under the request of the Securities and

In 1973, the Financial Accounting Standards Board (FASB) was created and their mission is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.” (FASB.org, 2009a). The FASB is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S. Therefore, the FASB plays a vital and important role in protecting the financial well being and the overall stability of our

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

This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This

There is no universal GAAP standard and the specific vary from one geographic location or industry to another. In the United States, the Securities and Exchange Commission (SEC) mandates that financial reports adhere to GAAP requirements. The financial accounting standards Board (FASB) stipulates GAAP overall and the Governmental accounting standards Board (GAAP) stipulates GAAP for state and local government. Publicly traded companies must comply with both SEC and GAAP requirements. In recent years it also has had the chance to look at the United States Generally Accepted Accounting Principles (GAAP) and modify the rules to enhance clarity and consistency, intentionally setting itself apart from U.S. GAAP. The convergence of these two accounting frameworks is a must for both foreign and domestic businesses. The International Financial Reporting Standards (IFRS) is the accounting framework used by the European Union, Japan, Canada, and other world economic leaders. Companies need an accurate and reliable financial accounting systems not matter if globally or in the United

For nearly half a century, a movement has been underway to establish a high-quality, comprehensive set of international accounting standards, with the goal of facilitating international trade and investment. In the global capital market, differences in the rules of accounting for the purposes of recognition, measurement, and reporting of financial results have impaired the smooth transfer of information across borders. Given that it accounts for nearly a third of the global market, there is considerable pressure for the United States to conform to the International Financial Reporting Standards (IFRS), as promulgated by the International Accounting Standards Board (IASB). While moving to a single set of accounting standards could create

The stock market crash in 1929 resulted in increased government regulation of businesses (Kieso, Weygandt, & Warfield, 2013). As a result, the United States “government established the Securities and Exchange Commission (SEC)” on June 6, 1934 “to help develop and standardize financial information presented to stockholders” (Hoyle, Schaefer, & Doupnik, 2013; Kieso, Weygandt, & Warfield, 2013). Although the SEC was created over eighty years ago, reporting requirements has evolved with the Sarbanes-Oxley Act (SOX), the SEC’s authority over generally accepted accounting principles (GAAP), and the numerous mandated filings with the SEC.

This difference is also tied to the movement of globalization by way of the internal customs from around the world. Based on these practices the account standards around the world are created from a different basis. In the U.S, accounting standards are based on “bright lined rules.” Whereas, in most of the world accounting standards are based off of principles, with the emphasis on principles the international rules focus on the heart of the law. Rather than in the U.S these “bright lined rules” have been created as a result of the multitude of industries located here. The rules however, do not reflect the heart of the law; rather they create a line to be maintained.

The Securities and Exchange Commission has time and again stated its commitment to shift from GAAP without any forthcoming efforts (Street 258). Despite the slow pace as compared to the other countries that are rapidly changing, the change has become apparent. The SEC allowed financial statements from foreign companies listed on the domestic stock exchanges with IFRS. However, the general approach of the United States to the matter has been of a cautious nature. The SEC adopted a

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.

The thought of implementing a uniformity in the accounting standards has been discussed for a long time in the world of accounting. In fact, there is a quote from Financial Times that stated “The goal of single worldwide accounting language has been a dream. Today it is fast becoming a reality, and the pace is picking up.” (Carmona and Trombetta 2008, p.456). Likewise, Ball (2006) had a great article discussing about the uniformity of the accounting standards. He had mentioned some interesting points such as the important of uniformity, as well as the disadvantages of it. Even though uniformity in accounting standards have been around for a while, it is still something that yet to be accomplished completely. In Ball (2006) stated his concern on this matter that even with the same standards it may be still some differences in the reports. Thus, in this essay there will be discussions whether uniformity of accounting standards is needed in producing the financial reports along with the obstacles some countries may occur when try to do it.

After a thorough analysis of several U.S. accounting failures such as those at ENRON, Worldcom, and others, individuals in the European Union and around the world claim that had the U.S. followed International Financial Reporting Standards, instead of U.S. GAAP, these debacles might never had happened. For many years, the accounting profession had faced several challenges developing a set of guidelines that would be generally accepted and universally practiced around the globe. In more recent years, more than 100 countries around the world, have adopted International Financial Reporting Standards in order to settle on a common worldwide accounting language. In today’s business world, the marketplace is demanding for increasing conformity. As gradually more companies start to adopt IFRS, a need for a single set of high quality standards rises and poses pressure on the United States to converge.

The Financial Accounting Standard Board issues GAAP, which focus on the practices of US companies. GAAP is known as the common set of rules, standards and procedures for accounting used in financial reporting. “GAAP is the combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information” (Investopedia.com, 2003). Companies follow GAAP rules to clarify the communication of financial information.

According to Mary E. Barth (2007), an analysis regarding the latest activities of the International Accounting Standard Board (IASB) have revealed that the use of fair value as a measurement base in financial accounting is probable to increase. With the increased probability of using fair value as a measurement base and the adoption of international accounting standards by Australia, it

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