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Nations have had different accounting standards historically that suited their own economic and social situations. As their economies became more global over the years, these differences in standards became a hindrance in conducting business. A company seeking capital in another nation had to change their financial statements to match the accounting standards of the other country. This need to revise financials to match another country’s requirements cost time and money that businesses would rather spend somewhere else. The need for an international accounting standard evolved from the continued increase in muli-national corporate involvement. In this paper I will address the issues that led to the creation of the International Accounting Standards Board and its relationship with the United States’ Financial Accounting Standards Board including pronouncements and the current convergence project. The MSA program’s contribution to students’ professionalism in the accounting field will also be addressed.
To address the increasing need for some type of international accounting standard, the Accounting Standards Committee (IASC) formed in 1973 in London as a result of an agreement between accountancy bodies in nine countries (iasb, 2012). The original members of the IASC were Australia, Canada, France, Japan, Mexico, The Netherlands, the United Kingdom, the United States, and West Germany. This organization completed the initial 39 ‘core’ international accounting standards (IASs) in 1998 and eventually became an oversight committee with the IASB assuming the standard-setting responsibilities in 2001. According to our textbook these agencies’ two main goals were to”formulate and publish in the public interest accounting standards to be observed in the presentation of financial statements and to promote their worldwide acceptance and observance” and to “work generally for the improvement and harmonization of regulations, accounting standards,...
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