Auditing

A BETTER WAY TO KEEP THE BOOKS?

In the latest example of the waning financial leadership of the U.S., the Securities & Exchange Commission wants to dump the country's complex accounting rules in favor of a simpler set of international principles. It's a major step toward a single worldwide standard--a necessity for creating seamless global markets. But adopting the model, which is relatively new and untested, has its own pitfalls.

Junking the U.S. rules, known as generally accepted accounting principlesThe standard accounting rules, regulations, and procedures used by companies in maintaining their financial records.

Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting

..... Click the link for more information., or GAAP GAAP

See: Generally Accepted Accounting Principles

GAAP

See generally accepted accounting principles (GAAP). , would have seemed preposterous a decade ago. Back then investors and companies, both in the U.S. and worldwide, viewed GAAP as the gold standard, a transparent system for reporting earnings and other financials. As more European and Asian companies rolled out results in the American style as well as their own, it seemed GAAP would be the top choice among bean counters in an increasingly global marketplace.

But GAAP has gotten so unwieldy that it has all but collapsed under its own weight. According to according to

prep.

1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.  accounting firm PricewaterhouseCoopers, the U.S. principles span 25,000 pages, compared with 2,500 pages of the International Financial Reporting StandardsInternational Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB).

Many of the standards forming part of IFRS are known by the...