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Date Submitted: 03/30/2014 01:11 PM

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International accounting standards that are universally acceptable are becoming progressively important as the economy becomes more globalized. Companies no longer operate in just one country; they are now require implementing international standardized accounting practices and principles to enable users of the financial statements access to comparable information that is useful and understandable. Having worldwide accounting standards will save multinational companies time and money since currently they are obligated to prepare multiple sets of financial statements; in order to cater to the standards of the different governing bodies and additional interested parties. Worldwide accounting standards will allow for better comparisons between companies from different countries and encourage investors to invest in companies they would not otherwise invest in.

What is Convergence?

Webster defines convergence as: “The process of coming together or the state of having come together toward a common point”. For accounting professionals, the word "Convergence” can be defined two ways. First, Convergence refers to the ongoing efforts between the US Financial Accounting Standards Board (which issues the U.S. Generally Accepted Accounting Principles) and the International Accounting Standards Board (which produced the International Financial Reporting Standards) to eliminate differences in accounting standards globally. Second, convergence refers to the absence of differences in accounting standards among different countries. Essentially, convergence is both a process and a goal; with the process continually bringing us closer to a single set of high-quality global accounting standards, and the implications of convergence for U.S. companies are growing in significance. Convergence is not a new concept; accounting standard-setters around the world have been working towards Convergence for decades.

How did Convergence get started, and who is involved?

The early moves...