Acc 541- Accounting Standards Board

Accounting Standards Boards

The Financial Accounting Standards Board (FASB) is the governing body of accounting in the United States. It was created in 1971 in response to a recommendation from the Wheat Committee. In 2009, the Accounting Standards Codification (ASC) was created. The goals of the ASC are the facilitation of easier user access of GAAP by organizing all GAAP in one spot, ensuring that codified content is an accurate representation of GAAP as of July of 2001, and creating an up-to-date research system. (Schroeder, 2010, p. 13) However, complaints many companies have with regard to GAAP include the overwrought language that makes GAAP inaccessible to many and the convoluted, highly specific requirements that make it difficult for some companies to comply.

The International Accounting Standards Board (IASB) is used in nearly every country in the world aside from the United States. The IASB was created in 2001 with the primary goal of coordinating international accounting standards. Now the IASB is used in nearly every country in the world, with the notable exception of the United States. Pronouncements of the IASB are called International Financial Reporting Standards (IFRS). The IFRS are written in a way that aims to be clear, even to those without an understanding of accounting jargon. In 2009, the IASB issued a pronouncement that “omits or simplifies the applicability of standards.” (Schroeder, 2010, p. 14) The IFRS are considered to be a “principles-based set of standards in that they establish broad rules as well as dictating specific treatments.” (Wikipedia, 2011, para. 2)

At the moment, IFRS are considered nonauthoritative by the FASB. (Schroeder, 2010, p. 20) However, since many companies now operate globally, there is a need for accounting standards that apply both domestically and internationally. The need for agreed-upon standards has led to the Convergence Project, a cooperative undertaking between the FASB and the IASB. This project...