Accounting Standards

Accounting Standards Board

Boyd Ferris

ACC/541

September 29, 2014

Leslie Crews

Accounting Standards Board

Over the course of history, the world of accounting has undergone great changes. The accounting field is a dynamic one. This is mainly due to the ever growing nature of business. With businesses expanding, their operations in turn grow in complexity. The way profit is recognized, the transaction of products and services, and how depreciation is calculated are just some examples of typical issues that cause some confusion in dealing with different methods. As a result, the need for regulations regarding accounting standards and practices became necessary. This was a great movement for investors. The reason is that establishing standards of practice with accounting essentially held businesses to a higher standard thereby providing would-be investors a certain degree of protection. Many organizations with the mission of regulating the accounting industry were established. Over time, they adapted and changed according to the environment. Today, the two predominant regulatory organizations that have the charge of establishing and communicating accounting standards are the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). Both of these boards work for the best interests of the public.

The relationship between IASB and FASB is a convoluted one. According to McGregor and Street (2007), both FASB and IASB are developing a framework which:

“…is both complete and internally consistent. Such a framework would provide a sound foundation for developing future accounting standards and is essential to fulfilling the Boards’ goal of developing standards that are principles-base, internally consistent, internationally converged, and that lead to financial reporting that provides the information needed for investment, credit, and similar decisions. That framework, which will deal with a wide range of issues, will...