What Would Financial Statements Look Like If There Were No Accounting Standards?

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

This text is still relevant to business today because it had the most basic processes for accounting some that are still used today; it is very outdated but nonetheless still quite useful

The purpose of this paper is to define accounting, and identify the four basic financial statements. The paper also explains how the different financial statements are interrelated to each other and why they are useful to managers, investors, creditors, and employees.

Even if uniformity were to be reached, the IOSCO disclosure standards do not encircle all of the information required of an easy access to cross-border capital markets.

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

The FASB Codification database is easy to use when researching the accounting standards once the basics are fully understood. The FASB Codification database can be accessed by logging in at http://aaahq.org/ascLogin.cfm and using the following codes (case sensitive):

In today's time the accounting and book keeping ranges from the old way of paper and pen to extremely large accounting data base systems for the major companies and organizations around the world; although either system could be used but

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.

In 2008, the Securities and Exchange Commission (SEC) issued a road map for the United States (US) to implement International Financial Reporting Standards (IFRS) that would eventually lead to the dissolution of US Generally Accepted Accounting Principles (US GAAP) (Cox 2008). US GAAP is rules based system of accounting that contains over 25,000 detailed pages of guidance, whereas IFRS is a principles based system of accounting that contains 2,500 pages of guidance. IFRS allows accountants to exercise professional judgment when making many decisions. This paper will compare and contrast US GAAP with IFRS on Intermediate Accounting Topics.

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.

Within a world driven by politics, many have discussed the impacts and consequences of accounting standards. The debate behind the creation of standards is a difficult topic. Should standards involve the bias of government and the people, or remain neutral from all influences? Many years ago accounting could have been considered non-political, but the ever-growing connection between public policy and business has placed pressures upon standard setters and the accounting community. The following paragraphs will debate if neutrality or politicization should be used to determine accounting standards.

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.

The purpose of this essay is to address the definition of a conceptual framework (CF) for financial accounting and why it is needed. The CF can be described as a “coherent system of inter-related objectives and fundamentals that should lead to consistent standards that prescribe the nature, function and limits of financial accounting and financial statements” (FASB, 1976). This suggests that the CF has a very important role in attempting to maintain domestic and international standards of practice. The CF also provides structure to the process of creating financial reporting standards and ensures that standards are based on fundamental principles (Gore and

The accounting world is shaped by stringent and clear rules, principles, standards and guidelines. These are all meant to define accounting operations and reporting discipline. With the emergence of International Accounting Standards (IAS), which was later replaced by International Financial Reporting Standards (IFRS), the accounting concepts, analysis, disclosures, reporting and presentation became easier and practical. Currently, accountants, managers and related parties find it concrete and consistent in protecting professional boundaries.