1. Will There Be One Set of Accounting Standards in Use Throughout the World in the Next Five Years?

Moving the world towards a single accounting standard has been a process that has been rapidly gaining impetus over the last several years. In the European Union (EU) as well as the United States (US) movement towards a unified standard has been underway. The EU now requires companies that are listed on the stock exchanges to use organize their financial statements to conform to the International Financial Reporting Standards (IFRS). The IFRS is a standard accounting framework accepted by the International Accounting Standards Board (IASB).

The US Securities and Exchange commission has taken steps towards the adoption of this standard first by allowing foreign companies the latitude of submitting their financial statements with IFRS framework without having to convert first to the US Generally Accepted Accounting Principles (GAAP).

Further indicators of the adoption of a unified world accounting standard come from an SEC roadmap for adoption of IFRS released in April 2009. In addition, the SEC released the following statement in February 2010; “As a step toward achieving the goal of a single set of high-quality global accounting standards, the statement notes that the Commission continues to encourage the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) in order to narrow the differences between the two sets of standards.” (http://www.sec.gov/news/press/2010/2010-27.htm).

While it is clearly evident that there is a long-term goal for the SEC and IASB to institute a single set of financial reporting standards for all public companies, the move towards a unified accounting system is not without its detractors. Concerns about the benefits, effects and overall costs of implementing a single world-wide accounting system are plentiful as well as commentary on if the IFRS standards are equal to or superior US GAAP standards.

A particular concern of companies that may make...