The Changing Accounting Environment: International Accounting Standards and US implementation

Sawani, Assma
August 2009
Journal of Finance & Accountancy;Aug2009, Vol. 1, p1
Academic Journal
Accounting provides useful information to decision makers, thus as the business environment has changed so have the accounting standards that govern the presentation and disclosure of information. International Accounting Standards are central to this concept. International standards were first developed in the late 1960's but they have reached their zenith of importance in today's economic and business environment. It is also evident that governments and policymakers recognize this change. This point was made publicly when the European Council of Ministers passed a resolution requiring all EU companies listed on a regulated market to prepare accounts in accordance with International Accounting Standards for accounting periods beginning on or after 1 January 2005. This decisive change was met with great furor in the accounting profession as well as in corporate boardrooms. The International Accounting Standards Board welcomed the resolution; pleased that the EU was among the first major "nation-states" to take the initiative and embrace international accounting standards. The EU recognized the many benefits of requiring the implementation of international accounting and auditing standards. Moreover, the Securities Exchange Commission (SEC) recently voted on a roadmap that requires U.S. public companies to use International Financial Reporting Standards by 2014. In light of the interests and activities of companies and users of financial information becoming global, the SEC released a statement declaring its involvement and support to develop a globally accepted, high quality financial reporting framework. The benefits of international accounting standards can be financial, economic and political. Preliminary evidence suggests that companies, lenders, and investors would prefer a convergence of domestic accounting standards with international accounting standards to create a quality financial reporting framework. Although there are significant benefits to implementing international accounting standards and it is increasing in importance there are still many challenges to further development and authoritative implementation. To best understand these challenges one must look at the factors that influence the development of accounting regulations. Such factors can include, social and cultural values; political and legal systems; business activities and economic conditions; standard setting processes; capital markets and forms of ownership; and finally cooperative efforts by nations. These factors if properly understood can mitigate or even eliminate the challenges to international accounting standards. International accounting standards are important today and will most certainly become more important for the future as they are further developed.


Related Articles

  • The European Union's Role in International Standards Setting. Brackney, Kennard S.; Witmer, Philip R. // CPA Journal;Nov2005, Vol. 75 Issue 11, p18 

    Examines the role of the European Union (EU) in regulating accounting and auditing standards under the International Accounting Standards Board (IASB). Conditions set by the U.S. Security and Exchange Commission to accept financial statements from EU companies in April 2005; Guidelines of the...

  • EU fears US influence. House, John // Accountancy;Aug2007, Vol. 140 Issue 1368, p81 

    The article reports on a controversy between the European Union (EU) and the Securities and Exchange Commission (SEC) of the United States over the use of International Financial Reporting Standards (IFRS). The SEC proposed to allow European companies to list on U.S. stock exchanges if they used...

  • Modern Financial Reporting Framework: Convergence. Tweedie, David // Financial Executive;Jun2006, Vol. 22 Issue 5, p19 

    This article discusses the accomplishments of the International Accounting Standards Board (IASB) and the challenges it faces in setting corporate accounting standards. The acceptance of international accounting standards reflects trends in the converging global economy and capital markets....

  • Tax Trends. Cummings, Rocky // Journal of State Taxation;Jan/Feb2009, Vol. 27 Issue 2, p11 

    The article discusses the impacts of the tax reporting and transitioning shift from the U.S. Generally Accepted Accounting Principles (GAAP) to the International Financial Reporting Standards (IFRS). In November 2008, the proposed "Roadmap" for the transition from U.S. GAAP to IFRS was released...

  • Rethinking the rush toward convergence. MILLER, PAUL B. W.; BAHNSON, PAUL R. // Accounting Today;4/6/2009, Vol. 23 Issue 5, p15 

    The article relates the intention of U.S. Securities and Exchange Commissioner (SEC) Mary Schapiro to proceed cautiously on the Convergence Roadmap of SEC. Concerns for the proposed convergence to the International Financial Reporting Standards (IFRS) are pointed out such as the concentration of...

  • The Question of IFRS Adoption: A Very Long Engagement. Ramanna, Karthik // CPA Journal;Apr2012, Vol. 82 Issue 4, p11 

    The article assesses the debate on the adoption of the International Financial Reporting Standards (IFRS) by the U.S. According to the author, it would be best for the Securities and Exchange Commission (SEC) to continue its influence over the International Accounting Standards Board (IASB)...

  • GAAP REQUIREMENT REMOVED FOR NON-U.S. COMPANIES.  // Practical Accountant;Jan2008, Vol. 41 Issue 1, p16 

    The article focuses on U.S. Securities and Exchange Commission (SEC) removing the requirements for non-U.S. companies to reconcile their financial statements to U.S. generally accepted principles (GAAP). The SEC accepted the financial statements prepared in accordance with International...

  • SEC Allows Foreign Private Issuers to Use Financial Statements Prepared in Accordance With International Financial Reporting Standards. Day, Jones // Venulex Legal Summaries;2008 Q1, p1 

    The article reports that the U.S. Securities and Exchange Commission (SEC) passed a rule that allows the use of Financial Statements. These financial statements are issued by the International Accounting Standards Board (IASB) and are prepared in accordance with International Financial Reporting...

  • Global Accounting Convergence: What in the World Is Happening? Lajoux, Alexandra R. // NACD Directorship;May/Jun2014, Vol. 40 Issue 3, p20 

    The article explains what the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are doing jointly and separately about global standards for public, private and nonprofit companies in the U.S. and what these issue mean for the global boardroom....


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics