The International Accounting Standards Board

Globalization has been changing the world. It has interconnected people, nations, and even businesses. Today´s business can share information to investors around the world thanks to the intelligent software of the actual society. Being more specific, the way in which investors and users evaluate businesses performance is through the information contemplated in their financial statements. These financial statements illustrate the current assets, liabilities, and stockholder equity a company has in order to help users take economic decisions. However, not all the companies are regulated to provide the same structuralized information around the world. Each country possesses its own accounting standard that regulates the preparation of financial statements of a company. In that way, companies’ information might differ between countries making the comparability between financial statements difficult to be implemented by users in order to assess the performance of foreign businesses. In view of the need of a globally accepted accounting standard that promotes uniform standards for worldwide financial reporting, the International Accounting Standards Committee (IASC), which then becomes replaced by the International Accounting Standard Board in 2001, was created (Cathey and Schroeder 130). The IASB issues International Financial Reporting Standards (IFRS) that stands as the set of accounting standards that prepare and present the financial

The IFRS are the standards, interpretations and the framework adopted and developed by the International Accounting Standards Board (IASB) (Freeman, 2014). These set of ac-counting standards would improve comparability of financial information as well as the flow and pricing of capital (Epstein at al 2009). IFRS is becoming the global standard for the prep-aration of company financial statements (Freeman, 2014). International compatible financial statements assist in lending decisions, loan monitoring, and establish international vendor credit and development of other international business relationship (Evans, et al.., 2005).

(Horton et al., 2013) stated that the adoption of IFRS (IFRS) requires changes in the financial and accounting area, in most systems and processes, as well as in the area of human resources companies. The accounting policies in accordance with international standards are definite principles, techniques, sources, agreements and practices implemented by an enterprise in preparing and presenting financial statements IFRS IFRS-audited according to IAS and ISA-COSO internal control, putting in operation and economic good accounting for disclosure of general purpose accounting information

International financial reporting standards (IFRS) are the attempt of the International Accounting Standards Board (IASB) to globally harmonize accounting standards and financial reports (Doupnik & Perera, 2014). Such standards are principles developed by the IFRS foundation and the IASB whose goal are to implement international accounting standards (IAS) which promote transparency, accountability, and efficiency of financial reporting to ensure organizations draft financial reports that are comparable internationally (IFRS Foundation, 2015). In an effort to facilitate the adoption of IFRS, accounting professional bodies worldwide such as the Institute of Chartered Accountants of Scotland (ICAS) have implemented initiatives to guide and train their members in understanding the new standards adopted within their espective country.

The International Accounting Standards Boards (IASB) and the Financial Accounting Standards Board (FASB) are making an effort to converge to develop International Financial Reporting Standards (IFRS) by gathering accounting standards that can be used in financial reporting whether it is in the home country or in the host country. Both the International Accounting Standards Board and the US FASB have proven to be vital promoters of the globalization of international financial accounting standards (Kirsch, 2012). These efforts have focused on a cohesive setting that will eliminate the controversy that revolves around accounting standards. I will present to you the facts and differences between the two, state the facts and identify

The U.S Generally Accepted Accounting Principles and the International Financial Reporting Standards are the two major accounting standards used by accountants today. The GAAP is currently used only by firms in the United States, while the IFRS is used by firms in 110 countries, including those in the European Union. The U.S Securities and Exchange Commission is in charge of GAAP for public companies, while the Financial Accounting and Standard Board overlooks private companies. The standards for IFRS are set by the International Accounting Standard Board. The main difference that separates the GAAP and the IFRS is that the GAAP was constructed based on rules, while the IFRS was created based on accounting principles. Although there are many similarities in the way most things are done, there are also striking differences regarding the way financial statements are reported, including inventory valuation, balance sheets presentation, asset definition, etc. This paper seeks to identify some of the major discrepancies between GAAP and IFRS, and present arguments people have made for and against converging the two standards.

Both speakers have made credible arguments towards the contradictory nature of the International Accounting and Financial Reporting Standards. Accounting standards are a method of regulating the reporting of everyday transactions within the profession, alongside laws, regulations and codes of professional bodies (Guest Lecturer, 2014). Regulatory regimes are necessary as they aim to achieve a uniform objective that published accounts in the market are to show a true and fair view of the entity they purport to represent. However, the qualitative characteristic “true and fair” is very much subjective to the professional publishing the accounts. As it is open to interpretation, certain entities can use this vulnerability to their advantage

With the globalization of international trades, it is necessary to design a common accounting language to compare the financial performance of companies from different countries. For this reason, International Accounting Standard Board (IASB) publish the International Financial Reporting Standards (IFRS) which are principle-based in order to improve the quality of financial reporting and to harmonize accounting standards in 2001.

Due to the global integration of business and finance throughout the world, approximately 113 countries have adopted or are working on convergence with IFRS. This paper is a look at the history and an examination of where IFRS stands internationally and with the United States. For several decades the industrialized world has been working toward an international set of accounting standards. Since IFRS has become the de facto international accounting language, it is logical that it will be accepted as that standard in the near future.

According to Delloite (http://www.iasplus.com/en/resources/ifrsf/due-process/background-to-ifrs)”The International Accounting Standards Board (IASB) is an independent non-profit organization that develops and approves International Financial Reporting Standards (IFRSs)”. In mainly usage, the term 'International Financial Reporting Standards ' (IFRSs) has both a narrow and a broad meaning. Firstly, IFRSs refers to the new numbered series of pronouncements that the IASB is issuing, as distinct from the International Accounting Standards (IASs) series issued by its predecessor. More broadly, IFRSs refers to the entire body of IASB pronouncements, including standards and interpretations approved by the IASB and IASs and SIC at 2001 interpretations approved by the predecessor International Accounting Standards Committee.” The IASB has all responsibilities for the technical matters of the IFRS Foundation. The objective of financial reporting is the foundation of the conceptual framework. Other aspects of the framework - qualitative characteristics, elements of financial statements, recognition and measurement - will build on that foundation with the aim of ensuring that financial reporting achieves its objective. The goal of IFRS as said at (source) is”to develop a set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles”. To surmount these difficulties and still connect accounting to

The IASB Conceptual Framework is a framework developed by the International Accounting Standards Board (IASB). In a nutshell, what this framework does is to lay out the concepts needed for accurate preparation and presentation of financial statements to external users such as auditors, tax authorities, investors, regulatory authorities and so on. According to the IASB, the Conceptual Framework for Financial Reporting does the following;

IFRS is a general global financial language for business affairs that’s understandable globally and comparable across the international boundaries. IFRS initially was formed to harmonize accounting across European Union, but the value of harmonization was so overwhelming and attractive around the world that became a benchmark globally.

The International Accounting Standards Board (IASB) is an independent body which approves and develops International Financial Reporting Standards (IFRS). They work under the oversight of the IFRS. The IASB was formed back in 2001 to replace the International Accounting Standards Committee. (www.iasplus.com,2015)

The chief objective of this report is to describe the advantages and disadvantages of International Financial Reporting Standards (IFRS) conceptual framework in general. The report also directs attention towards Australia’s step towards harmonization of the accounting standards and as well as on international financial reporting system. However, the prime focus of the report is on the adoption, implementation and the impact of IFRS framework in a developing country, Bangladesh. The very report advocates that the adoption and implementation of IFRS framework has both positive and negative sides. In spite of financial and time constraints in adopting IFRS every nation is keen towards being a member of IFRS accounting standards. It is because countries want to trade globally and for such purpose they need investors. In order to attract and retain such potential and existing investors firms/organization need to follow certain accounting standards in generating the financial reports that are accepted worldwide. Finally, the report concludes that the worldwide harmonization of accounting standards has many future benefits along with some short term obstacles, however, it is difficult to apply the same accounting standards worldwide as each and every country differs from another in respect of its enforcement mechanism.

IFRS is an international accounting standards that were developed by the International Accounting Standards Board (IASB). These standards define how a company should report its financial statements based on accounting principle rather than “rules-based accounting standard” like US GAAP (Dumont, 2012). According to AICPA, IFRS standards can help businesses to have the same financial statements like their competitor as well as attracting foreign investors. In addition, a company that has subsidiaries in different countries would have a uniform financial statements company wide. However, convergent process can pose a serious issue for U.S. businesses in terms of financials and internal controls due to the fact that US GAAP focuses more on details for reporting purposes. Many U.S. companies believe that US GAAP is the golden rule and the huge amount of converting cost would offset the benefits that IFRS offers (AICPA, 2015).