Title: A Survey of Accounting Educators Regarding Convergence of Financial Reporting Standards
Abstract: Generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) are becoming more and more similar. Though their sources are different and though GAAP has the force of the authority in the United States, the two sets of standards are reaching a greater level of convergence. In some cases, GAAP has been altered in order to align with the position of IFRS. Similarly, some IFRS have been altered in order to converge with GAAP. The motivation for these changes is to improve financial reporting standards across political borders by creating a common set of standards. In the process, global markets will benefit from having standards that are comparable worldwide. The purpose of this paper is to summarize the progress made toward convergence and report the results of a survey of accounting educators regarding their opinions of the current progress and future potential for convergence of financial accounting standards. Financial reporting standards in the United States and internationally have different origins. Standard-setting in the United States began in 1939 with the formation of the Committee on Accounting Procedure, which was replaced in 1959 by the Accounting Principles Board, which also was replaced by the current standard-setting body, the Financial Accounting Standards Board (FASB), in 1973. Internationally, the International Accounting Standards Committee (IASC) was founded in June 1973 as a result of an agreement by accountancy bodies in Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland, and the United States. The IASC had full autonomy in setting international accounting standards and in publishing discussion documents on international accounting issues. The International Accounting Standards Board (IASB), which issues international accounting standards today, was formed as the successor to the IASC in 2001 (IASB, History). Historically, standards issued in the United States and those issued internationally have not been coordinated. Although the IASB has existed since 2001, only recently have its standards had a significant impact on U.S. generally accepted accounting principles (GAAP). After a joint meeting in September 2002, the FASB and the IASB issued their Norwalk agreement in which they each acknowledged their commitment to the development of high quality, compatible accounting standards that could be used for both domestic and crossborder financial reporting. At that meeting, the two boards pledged their best effort to make their existing financial reporting standards fully compatible as soon as practicable and to coordinate their future work to ensure that once achieved, compatibility would be maintained (IASB, 2006). Some have suggested that international financial reporting standards (IFRS) that are issued by the IASB could eventually replace GAAP in the United States as well as standards issued in other countries. In fact, approximately 100 countries require, allow, or plan to converge with IFRS (McGill, 2007). GAAP and IFRS are becoming more and more similar. In some cases, the FASB has altered its standards to align its position with IFRS. Similarly, some IFRS have been issued that converge with U.S. GAAP. The motivation for these changes is to improve financial reporting standards across political borders by creating a common set of standards. In the process, global markets will benefit from having standards that are comparable worldwide. The purpose of this paper is to summarize the progress made toward convergence and report the results of a survey of accounting educators regarding their opinions regarding the current progress and future potential for convergence of financial accounting standards.
Publication Year: 2011
Publication Date: 2011-01-01
Language: en
Type: article
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