The Evolution of Indian Accounting Standards: Its History and Current Status with Regard to International Financial Reporting Standards

Convergence has become increasingly critical across nations in accounting mainly due to the global economy and need of international capital market. In the light of that, a demand arose for standardization of financial reporting in order to enable users of accounting reports among different countries to read, understand appropriately and being in a position of analyzing financial statements came from different countries. However, the paper argues that the link between convergence and comparability of financial reporting is to be questioned when it comes to different countries such as China.

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.

Most private business owners have unlimited access to the day to day operation records of their companies. Additionally, it has been found that private companies have a costly yoke. They have to comply with US GAAP which is a pointless waste of resources (AuditWatch, 2010). While small business owners in the US are not able to use relaxed accounting standards as of yet, however, they may in the near future enjoy the same privileges as their “international” counterparts. In late 2011, the FASB commenced a project to examine whether there are any grounds to exempt non-public companies from providing disclosures pertaining to fair-value disclosures (Fair Value Project, 2011). Although it may seem like another dead-end with regard to the Little-GAAP vs. Big-GAAP issue, but it is a step in the right direction by the FASB to end this classic debate.

In the 1970’s there was an increase in discussions about unifying reporting procedures. With the increase of business dealings between companies in different countries the experts started to ask the question: “Why can’t we agree on a single reporting practice”? Now, logic would have it that anyone looking to invest in a company or do business with a company in another country should be able to look at their financial reports and make a sound decision. The problem arises when a company in the US is examining a company in Germany and the American company is unable to make a confident assessment of the financial standings of the company in Germany due to the dissimilarity in the financial records. The lack of transparency (and possible inaccuracies) suggests that it

Accountants have used whatever tactics they could to place a positive spin on the financial statements. Over the years, there was a need for improvements in financial reporting. In 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34; which caused a major change in the reporting requirements of the government (Fischer, Cheng, & Taylor, 2009). This also led to a very comprehensive accounting process. GASB 34 made big improvements in how the government views their financial statements.

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 provides detailed information about the aspect or revenue recognition as compared to the US Generally Accepted Accounting Principles and International Financial Reporting Standards as the standards that are used in accounting (Ammons 45). The diverse differences that exist when either of the standards is used can be clearly noted as the paper illustrated the major variations in applications. Financial statements made using the right standards and procedure such as US GAAP and IFRS usually provides relevant, understandable, comparable and reliable financial statements that show a true and fair financial position of a company to all the users of financial statements

It is incontestable that international financial reporting standards (IFRS) are in vogue and global conformity theoretically on the doorstep as about 100 countries implement standard financial regulations. The idea that uniform reporting standards have the same effect on financial reporting undervalues the contested ability to be flexible in financial reporting and introduces another level of debate on the issue of flexibility and uniformity. Apart from the fact that the merits of flexibility are downplayed to increase cross-sectional and inter-temporal comparison, prescribed reporting standards compliance is itself not enough basis to claim that financial reporting. The IFRS comprises of principle-based standards that have presents financial report manager with the opportunity to increase flexibility on their part and possible manipulation (Benston, 2006). Consequently, the fact brings another issue into question, for instance, the reliability and transparency of information produced under professional discretion and judgment of managers. This paper seeks to indicate that there are too many current financial reporting issues that are not yet conclusively included in the crusade for the adoption of uniform financial reporting standards on the notion that uniform standards improve the quality of financial reporting regarding comparability.

The article is showing the relationship between IFRS adoption and the effect on the quality of the information in low investor protection countries. International Financial Reporting Standards (IFRS) is a set of accounting standards, developed and maintained by a not-for-profit organisation which is called International Accounting Standard Board (IASB) (http://www.ifrs.org/About-us/Pages/What-are-IFRS.aspx). The purpose of IFRS is to provide a global framework and also a general guideline to all firms such as public companies, so that they can prepare and disclose their financial statement globally. It is interpreted as it can provide the investors and other users (internal and external users) with financial statement that has ability to be compared with other company either within countries or overseas (http://www.ifrs.org/About-us/Pages/What-are-IFRS.aspx // http://searchsecurity.techtarget.co.uk/definition/IFRS-International-Financial-Reporting-Standards). It also uniting the capital market under one common reporting language and this would lead to produce high quality financial reporting across the world (ball,2006). This article has included 3 countries which in the low investor protection countries such as France, Germany and Sweden, in order to examine the effect of IFRS adoption on information quality. Besides, the three countries have different

The main purpose of financial reporting is to deliver transparent financial information regarding a company to the investors and general public. The financial crisis of 2008 had shown that absence of transparency in the financial statements may have an adverse effect on investor confidence. High quality accounting information is an essential criterion for well- functioning economy as investors rely on this information for investment purposes. Value relevance is thus one of the basic attributes of accounting quality. (Francis et al. 2004)

The purpose of financial statement is to provide entities form employee’s to government organizations to include all stakeholders viable and reliable information that effects strategic decisions. With the differences between the U.S. GAAP and IFRS pose problems over the an acceptable accounting flaws that exist with in standards of accounting practice relevant to manipulate the system that has been adopted. Via Turner Investments (2016) a CPA blogger says "Anyone who believes all countries can embrace international accounting standards and use those standards in the same way is dumber than a sack of rocks, The New York Times Web site.” Additionally, as cited by Hassan (2015) of Zhou and Chen that “the reason why banks manipulate earnings is supported by three arguments: signaling argument, income smoothing or earnings management argument and capital management argument” (p. 93). Further in concern, is a statement by American Institute of Certified Public Accountants (AICPA) that the “U.S. GAAP must go” declared in Forbes.com that the system can “collapse under its own weight” due to playing and construing financial records (Turner Investments, 2016). The regulation heavy U.S GAAP bares constraints and needs to be more user-friendly as with the IFRS standards given way to a universal international accounting system reflective of the times we live in.

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

The purpose of this report is to address the complexity of financial reporting and how the International Accounting Standards Board (IASB) intends to do address this problem through its ‘Disclosure Initiative’.

Every business has to prepare its financial statements for its investors and making its business decisions. Company’s financial conditions are of major concern to the investors and creditors. As capital providers they rely on the financial statement for safety and profitability of their investments. They are also interested in knowing where and for what purpose their money is being used. Financial statements present the financial health of the entity.

After reviewing some of most notorious challenges facing the IFRS abroad, we focus our attention on presenting information about some of the IFRS successes in pursuing their goal to a single set of financial reporting standards.