Accounting Standards Board

Accounting Standards Boards

Student

ACC/541

Date

Facilitator

Accounting Standards Boards

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have created a project together where the scope of the project is to come to a collective set of standards between the two organizations. With the growth of larger businesses into international economies and the differences in laws and standards in different countries, businesses could either be confused by different standards written by the different organizations, or take advantage of those differences. They recognized the need for a globally based set of accounting and financial reporting standards. There is a wide range of differences between the two standards which the convergence project has been tasked to phase out. The project was developed by a concession between the two boards in October 2002 called the ‘Norwalk Agreement’ (Deloitte Global Services, 2013).

History

The International Accounting Standards Board replaced the International Accounting Standards Committee in 2001. The IASC’s primary focus was to see that all financial reporting on a global basis used the same accounting standards, although not many countries did not use them due to internal infrastructure issues. This committee was formed with members from nine countries including the United States (Schroeder, Clark & Cathey, 2011, p. 82). They acted in a way that would ensure that existing standards are acceptable. The replacement of the committee with the IASB was the result of the need to change the way the standards were set with regards to the treatment of the accounting standards. The IASC created the benchmark treatment and the alternative treatment which allowed for some loose interpretations and actions on multinational companies. The IASB, instead of allowing existing standards to be called acceptable, acted in a more leading role, initiating changes that would be...