Accounting | Business | Finance and Financial Management
There has been controversy brewing among accounting professionals regarding the impact of switching to International Financial Reporting Standards (IFRS) on United States corporations as deemed to converge in the near future (Deming, 2005). The viewpoint presented in this paper is that the United States should conform to the international standards primarily because a single set of standards creates uniformity and comparability for stakeholders regardless of their geographic location. This paper addresses the potential advantages and disadvantages of moving to a global set of standards as well as how the Financial Accounting Standards Board (FASB) will need to work with the International Accounting Standards Board (IASB) to align the current United States Generally Accepted Accounting Principles (GAAP) with the newly proposed international accounting standards. If adopted, a wide range of issues relating to the operations within a business will need consideration in the future. One of these issues include effects of taxes as businesses will need to become keenly aware of how a country’s tax law and auditing practices affect their operations. The paper presents the repercussions United States corporations will face as a result of the convergence and how future accounting professionals, investors, financial institutions and students of accountancy. They will need to continue to stay abreast of changes in this area as these changes can ultimately change the way accounting standards are practiced, credentialed and taught over the next decade.